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NZ Steel sells Taharoa ironsand export business to Hong Kong firm
30 September 2008, Source: BlueScope Steel and Lindsay Clark - New Zealand Steel’s export ironsands business at Taharoa on the west coast of the North Island has been sold for NZ$250 million to Hong Kong’s largest infrastructure firm Cheung Kong Infrastructure Holdings, also known as CKI.
BlueScope Steel Ltd, the Australian-based parent company of steel producer New Zealand Steel said the sale is expected to be completed by the end of the year. The sale is subject to Overseas Investment Office approval.
CKI has diversified investments in energy and transportation infrastructure and other business. It also operates in Hong Kong, mainland China, Australia, United Kingdom, Canada and the Philippines.
The Taharoa ironsand operation is a dedicated export business based 200 km south of Auckland near Kawhia Harbour, which ships iron sand to steel producers in China and Japan. Currently it ships about 850,000 tonnes of ironsand a year to steel makers in China and Japan.
The Taharoa business employs 40 full time staff and reported 2008 year revenue of approximately NZ$53 million and net profits after tax of approximately NZ$11.5 million.
The sand resource is concentrated to yield the titanomagnetite in the sand. The concentrate is stored then pumped through a 2.5 km pipeline to an offshore buoy for loading onto moored ore ships.
The mine has 22 million tonnes of contained product in proven reserves and 9 million tonnes in probable reserves. Total resources (inferred, indicated and measured) are 660 million tonnes.
Current chemical analysis of the Taharoa ironsand is: Fe 56.8%, V2O3 0.45%, and TIO2 7.7%.
The BlueScope annual report (produced just before the Taharoa sale) said that the company had been looking at the option of producing pig iron at the Taharoa site to produce added value and meet growing demand for pig iron and ferrous scrap.
NZ Steel also mines ironsand at Waikato North Head but which the company is retaining as it provides a long-term source of ironsand raw material for its Glenbrook steel mill just south of Auckland.
Paul O'Malley CEO of BlueScope said, "The sale generates a strong financial return for BlueScope Steel and reflects the current high world demand for iron ore."
