Arrium looks to strike gold at iron sites
Speaking at the Melbourne Mining Club, Mr Roberts said Arrium's iron ore tenements in South Australia were prospective for other metals and the company would investigate them this financial year.
"Our exploration history has been more focused on the ferrous side ... we are really starting to pay more attention to the copper and gold opportunities that particularly sit in the southern iron business," he said.
Mr Roberts also flagged plans to continue growing the company's mining consumables business, which involves production of steel balls that are sold to miners for the purpose of crushing ore. The business is heavily represented in Central and South America and Mr Roberts said he was looking at further "potential investments" in China, Brazil and Peru.
Growth in those fields continues the company's evolution away from being a pure steel maker, a process that led to the company changing its name from OneSteel to Arrium in a bid to highlight its growing iron ore export business. The company is now one of the five biggest exporters of iron ore in Australia and could increase exports to 13 million tonnes if some railway bottlenecks can be eased.
The benchmark iron ore price has been worth about $US123 a tonne in recent days and Mr Roberts said falls in the Australian dollar meant local exporters were effectively getting prices closer to $US135 a tonne.
"That's a good price," he said, rejecting the bearish forecasts for iron ore that have become common in recent months. "We are continuing to see very strong steel demand and that will continue to flow through into iron ore."
Mr Roberts said there was little sign of improvement in the company's traditional steel business, which is more exposed to high-rise construction and industrial construction than the housing construction sector.
He said the steel business was holding its own against imports but the sector was at "the bottom of the market".
Arrium is merging its steel operations into a single business and will continue to focus on costs in a bid to keep the steel business profitable.
Mr Roberts declined to comment on the future of Australia's carbon tax, despite it affecting Arrium more than most businesses.
Arrium shares closed more than 5 per cent higher at 87¢ on a day when most iron ore stocks rose.
Frequently Asked Questions about this Article…
Andrew Roberts said Arrium will investigate gold and copper opportunities on its South Australian iron ore tenements this financial year, grow its mining consumables business (steel balls used to crush ore) and look at potential investments in China, Brazil and Peru.
Yes. Roberts said Arrium's iron ore tenements in South Australia are prospective for gold and copper, and the company plans to investigate those opportunities during the current financial year as it shifts some focus beyond purely ferrous exploration.
Arrium's mining consumables business produces steel balls sold to miners for crushing ore. The business is heavily represented in Central and South America, and the company is looking at further potential investments in China, Brazil and Peru.
Arrium has broadened its focus from steel manufacturing to iron ore exports and other mining products. The company changed its name from OneSteel to Arrium to reflect that shift, and it is now one of Australia's five biggest iron ore exporters while continuing to grow non-steel businesses.
Arrium could increase exports to about 13 million tonnes if some railway bottlenecks can be eased. Railway capacity constraints are the main limitation mentioned for raising export volumes.
Roberts noted the benchmark iron ore price had been about US$123 a tonne recently, and falls in the Australian dollar meant local exporters were effectively receiving prices closer to US$135 a tonne. He called that a good price and rejected recent bearish forecasts due to continued strong steel demand.
Roberts said there was little sign of improvement in the traditional steel business, which is more exposed to high-rise and industrial construction. The steel business is holding its own against imports but is at the bottom of the market, so Arrium is merging steel operations into a single business and focusing on costs to keep it profitable.
Arrium shares closed more than 5 percent higher at 87 cents on the day the announcements were made. Roberts declined to comment on the future of Australia's carbon tax, despite the company being more affected by it than most businesses.
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