Iron ore producer Arrium could soon expand to gold and copper production, new CEO Andrew Roberts said on Thursday.
Roberts spoke about the growth programs at the Melbourne Mining Club, saying Arrium’s iron ore tenements in South Australia had potential for other metals and the company would examine the opportunities this financial year.
“Our exploration history has been more focused on the ferrous side...we are really starting to pay more attention to the copper and gold opportunities that particularly sit in the southern iron business,” he said.
Arrium is one of the five largest exporters of iron ore in the country and could expand exports to 13 million tonnes provided certain railway restrictions can be relaxed, the SMH reported.
Roberts said the company will continue with its mining consumables business, where it produces steel balls, which miners use for crushing ore. Arrium has a presence in Central and South America and Roberts indicated spreading into China, Brazil and Peru.
The iron ore price has been sitting at $US123 a tonne the last few days and Roberts said exporters were getting it at $US135 a tonne due to the declining Australian dollar.
“That’s a good price,” he said.
“We are continuing to see very strong steel demand and that will continue to flow through into iron ore.”
Roberts disagrees with recent bearish predictions for iron ore over the past few months.
He said the steel sector was surviving against imports but it was at ‘the bottom of the market’.
The company’s steel business, which is more involved in high-rise construction and industrial construction than the housing construction area, is not improving, Roberts said.
The company will combine its steel ventures into a single business and will concentrate on costs to boost the sector’s revenue.
Morgan Stanely analyst Joel Crane said Chinese steel production was ‘cranking’. Production now stands at 796 million tonnes a year, compared to 711 million tonnes in 2012. The Tianjin iron ore price increased by 12 per cent on May 31, The Australian reported.
Iron ore imported through the northeast Chinese port of Tianjin climbed yesterday to US20 cents, or 0.2 per cent, to $US123.90.
The company changed its name from OneSteel to Arrium to highlight its shift away from just a steel business and into the mining industry.
Roberts would not comment on Australia’s carbon tax. The tax has impacted Arrium more than many other businesses.
Arrium shares rose five per cent at 87c, similar to most iron ore stocks, which rose.