China CITIC Pacific Mining officials have announced moving into the initial production phases at their $8-billion Australian iron ore project at one of China's costliest offshore mining developments following years of delays.
The Queensland project has been behind schedule since 2009 and billions over budget; commissioning of the project's first two production lines has been ongoing since July, CITIC officials said in an e-mailed statement, according to Reuters. "We are moving into the production stage," it said.
The project, one of the largest of its kind undertaken by a Chinese entity outside the mainland, has been riven by legal problems. Six years after the company bought the rights from Australian tycoon Clive Palmer, it has yet to turn a profit, prompting Beijing officials to implement a more cautious approach when approving overseas mining investments.
The Hong Kong-based CITIC Pacific, controlled by the state-owned CITIC Group, hoped to begin exporting iron ore in May. But grinding mill problems, a component in the production of the magnetite found in the far western Australian deposits, forced delays; costs have since swelled to almost $8 billion from $2.5 billion.
The development aims to produce up to 24 million tons of iron ore concentrate annually; CITIC Pacific's steel plants will use the steel material and sell it to other Chinese steel producers. Last month, CITIC said the focus through Q4 2012 would be ensuring the stable running of the first production line and full capacity ramp-up.