China's largest stainless steel maker invests in Myanmar nickel mine

China's largest stainless steel maker invests in Myanmar nickel mine

China People's Daily

30 July 2010

Taiyuan Iron and Steel Group (TISCO) signed an agreement with China Nonferrous Metal Mining Group (CNMC) on July 26, to jointly develop the Tagaung Taung nickel mining project in Myanmar, according to an announcement on TISCO's Web site on July 29.

CNMC Nickel, a wholly-owned subsidiary of CNMC, was previously in charge of developing the Tagaung Taung nickel mine. After signing the agreement, TISCO will inject capital into CNMC Nickel to acquire a certain share in the increased capital stock.

The Tagaung Taung nickel mine marks the largest mining project in which China has ever cooperated with Myanmar. The mine has a reserve of more than 30 million tons of high-grade nickel ore containing some 700,000 tons of nickel.

The project, which will be in operation from 2011 to 2031, will attract an investment totaling 800 million U.S. dollars and produce 85,000 tons of nickel-iron containing 22,000 tons of nickel a year. In addition, the construction of mining, smelting and service facilities is well under way.

Nickel is a scarce strategic resource for almost all countries, and China is no exception. TISCO, the world's largest stainless steel manufacturer, alone consumes at least 100,000 tons of nickel a year.

"As the most important raw material for stainless steel production, nickel takes up a large portion of production costs," said Zeng Jiesheng, an analyst at MySteel.com, a steel market research and analysis firm.

TISCO said that the Tagaung Taung nickel mine project will greatly alleviate China's nickel shortage and reduce domestic stainless steel producers' risks from fluctuations in nickel prices, and it is actively carrying out mining projects in the Philippines, Indonesia, Australia and other countries.