Chinese Investment in Canadian Iron Ore Expected to Spike
Volatile iron ore prices in 2013 should prompt Chinese firms to continue investing in Canadian development projects, an industry analyst said Wednesday.
Jackie Przybylowski of Desjardins Capital Markets expects investments will continue on “an opportunistic basis” in the coming year, after a very active 2012 when the Chinese bought into projects around the world, including five in Canada.
“Chinese steelmakers’ investment in Canadian iron ore and metallurgical coal development projects is a positive as this provides firms with access to much-needed and hard-to-secure capital,” she wrote in a report.
Late last year, China Steel Corp. in partnership with South Korean steelmaker Posco, acquired a 15 per cent stake in Montreal-based ArcelorMittal Mines Canada for $1.1 billion in cash.
Earlier Chinese investments in Canada included Century Iron Mines’ Sunny Lake project, Northern Star Minerals Ltd., Alderon Iron Ore and Adriana Resources’ Lac Oteinuk project.
Przybylowski said investors are seeking projects with potential for significant longer-term production volumes and will generally invest in projects at an early stage. He said Chinese steel firms will continue to secure long-term ore supply and manage input costs in the face of continued volatility of iron ore prices this year.
– Canadian Press