The total reserves are 320 million tons! Vietnam Iron and Steel leading and Development Group: win the Australian Iron Ore Project

According to Vietnamese media reports, Vietnamese steel prices have risen wildly since the beginning of this year. A construction contractor in the country said that at present, Vietnamese steel prices have risen 40% to 50% compared with the end of 2020, while sand, cement, construction bricks and other prices have also followed suit, pushing up construction costs, which puts a large number of Vietnamese construction contractors at risk of closure and bankruptcy. Reported that Vietnam steel prices continue to rise, mainly due to iron ore and other raw materials import prices rise too fast. So Vietnam made a move.

With a total reserve of 320 million tons, Vietnam's iron and steel leader bought the Australian iron mine!

Hoda Group, Vietnam's largest private steelmaker, confirmed on May 31st that the Australian Federal Investment Committee had agreed to approve the acquisition of a 100 per cent stake in the (Roper Valley) iron ore project in Australia's Looper Valley. This is the first overseas iron ore project of Hefa Group. According to the confidentiality agreement between the two sides, the contract amount has not yet been formally disclosed.

Upon completion of the deal, Hofa will have the Luopogu iron ore project with reserves of 320 million tons and annual production capacity of 4 million tons. At present, Hofa is also considering continuing to acquire Australian iron ore to meet the group's future demand of no less than 50 per cent, equivalent to 10 million tonnes of iron ore per year.

Zhang Qinghuai, director of the Industry Bureau of Vietnam's Ministry of Industry and Trade, said earlier that raw materials for steel production in Vietnam, such as iron ore, scrap, coke and graphite electrodes, need to be imported. This year, the country needs to import more than 18 million tons of iron ore, 6.5 million tons of scrap steel and 6.5 million tons of coke. The cost of steel production depends largely on the price of raw materials on the international market, and the Platts iron ore index hit an all-time high of $229.55 a tonne this year, making Vietnamese steel mills miserable.

Now Vietnam and Australia have reached a cooperation to successfully acquire the Luopogu iron ore project, which will, to some extent, ease the pressure of crazy rising steel prices in Vietnam.

It is worth mentioning that as the world's largest steel producer, China's overseas iron ore investment map is also expanding. In October last year, a Chinese company obtained an abandoned iron ore mining license on Parrot Island in Western Australia. And owns the control of the Phoenix Parrot Island Mining Company for 12 years. But in March, Australia said it was highly concerned about the project on security grounds. Some voices pointed out that Australia's statement does not rule out the possibility that the country will not abide by the agreement to recover the mining rights of Chinese enterprises.

Backed by the Chinese market, the Australian economy has recovered smoothly, growing by 1.8% in the first quarter compared with the previous quarter.

You know, because of the serious epidemic in Brazil, many mines owned by Vale, the world's largest iron ore supplier, have stopped operation one after another, and a ship loader fire occurred at the giant's largest iron ore export terminal, resulting in Vale's iron ore output of only 69 million tons in the first quarter of this year, lower than the average analyst forecast of 72 million tons, directly affecting the global price of iron ore.

It should be noted that more than 80% of China's iron ore is imported and mainly depends on the world's four largest iron ore suppliers, such as Rio Tinto, BHP Billiton, Vale and FMG. Only Brazilian and Australian iron ore account for 81% of China's total iron ore imports. What does the decline in capacity in Brazil mean? Australia will quickly come to China to fill the gap.

Data show that in the first quarter of 2021, China imported 283 million tons of iron ore, an increase of 8% over the same period last year, with an average import price of 150.79 US dollars per ton, up 64.51% from the same period last year. Thanks to strong Chinese demand, Australia earns $585 million a day from iron ore trade with China, according to Australian media reports.

With the help of iron ore, Australian exports to China reached US $33.7 billion (about 215.5 billion yuan) in the first quarter of this year, an increase of 20.7% over the same period last year. In this way, Australia's economy, which relies on the Chinese market, has also recovered smoothly. According to the latest data released by the country's statistics bureau, Australia's GDP grew 1.8 per cent month-on-month in the first quarter of this year, higher than the 1.5 per cent expected.