DHHFs global approach

Despite hosting some 6 million people, Dalian, north-east China, is considered one of the country's smaller cities

Dalian Huarui Heavy Industry GroupCo. Ltd's (DHHI) "all out" effort to

expand into the global market place hasproven fruitful in recent times.

Following its first sizable package de-livered into Europe, through delivery ofa grab ship unloader into Croatia, DHHIlanded contracts in Bangladesh and Iran.

According to DHHI, Bangladesh and

Iran were "unexpected countries" inwhich to do business.

Breaking into both markets took pa-tience and careful work, particularly inIran, where sanctions against the coun-try have been relieved.

DHHI has signed a cooperation con-tract to supply heavy-duty cranes for anIranian steel plant, including 10 large

Red River Group, China Desk managing director Robert Williamson in Dalian

cranes ranging from 240t to 350t for ametallurgic plant.

Meanwhile, four sets of 800 tph bridge-type grab ship unloaders for an ultrasupercritical power plant for the Pajalaproject phase will be exported to Bang-ladesh.

While the contracts in Iran and Bang-ladesh are small compared to the oneswith Hancock Prospecting Pty Ltd atRoy Hill and the stackers and reclaimersdeveloped and manufactured for ValeS.A.'s S11D Carajas iron ore project inBrazil, tapping into new markets is justas crucial for the company.

It is also a demonstration of DHHI'sability to deal with companies and coun-tries from varying backgrounds, whichhas been fully endorsed by some Aus-tralian companies.

"I think they are going to be one of ourbest partners. We are helping them tothe extent that we can. As we deal withsteel makers in the Middle East whoneed ship unloaders and stuff like that,we pass that on. They are very much apartner in the relationship. We talk aboutbeing family and they are serious aboutit, it is a very deeply engrained conceptin China," Magnetite Mines Ltd executive

chairman Gordon Toll said.Framework is in place for Magnetite

Mines to merge with Lodestone EquitiesLtd of which Toll is the major owner andchairman.

Through subsidiaries - Fe Mines Ltdand Olary Magnetite Ltd - Lodestoneowns an area of ground totalling 200kmof Braemar Iron Formation in South Aus-tralia.

Lodestone also owns Braemar Infra-structure Pty Ltd (BIPL).

The 2.7bt Mawson magnetite projectis the focus for Magnetite Mines and theSouth Australian Magnetite Consortium,currently comprised of Magnetite Minesand Lodestone.

There is a firm belief within the consor-tium that "magnetite will have its day" andsubject to funding, Mawson could be inproduction by 2020.

"Financing any project isn't easy andit doesn't matter about time; financingFortescue [Metals Group Ltd] in the firstinstance wasn't easy," Toll, who was for-mer chairman at Fortescue, said.

Given 2020 is fast approaching, theconsortium and its selected engineeringgroup Calibre G&S, have engaged DHHIto promote the South Australian magnet-ite floating wharf and mine project.

Calibre G&S, which flies under parentcompany Calibre Group, the consortiumand DHHI have discussed opportunitiesto expand the Australian magnetite mar-ket.

The ease and abundance of hematiteto dig and ship in Australia, has magnet-ite players facing a wave of scepticismfrom investors and market observers,however, Toll believes times will change.

"I think we need to do more educationwork [on magnetite in Australia]," Tollsaid.

"Firstly, magnetite is a good steelmak-ing material, but you have to have theright rock and you have to have the righttarget markets."

The consortium has signed a LOI withKuwait Steel United Steel Industrial Co.(K.S.C.C or Kuwait Steel), over the saleand purchase of up to 4 mtpa of ultrahigh-grade pellet feed.

A LOI with Qingdao Iron & Steel Groupfor the purchase of 1 mtpa iron ore con-centrate signed late last year is among anumber of other agreements in place forproduct from Mawsons.

"If we were in production now, we'd selleverything we produce," Toll said.

"One of the best LOIs we have is withShagang - the largest private steelmakerin China - and they make 40 mtpa of hotmetal.

"I don't think it is China's intention toreduce steel output, their intention is to

DHHI is the biggest company specialised in design and manufactureof hoisting machinery in China

be far more efficient and be the steel-maker of the world," Toll said.

Therefore, having access to the bestraw material will be vital and Robert Wil-liamson, managing director of Red RiverGroup, China Desk, is bullish on theprominent role magnetite will have in thefuture of steelmaking.

"Magnetite is going to have its day," Wil-liamson said in light of hosting Paydirt in

Dalian, north-east China, recently."China has restructured its steel indus-

try significantly with large new steel millsnext to some very big ports to receiveseaborne, high-grade iron ore and mostof the seaborne ore is high-grade [mag-netite] concentrate."

- Mark Andrews