Moly Mines in China Iron Ore Sales Talks, CEO Says

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Moly Mines in China Iron Ore Sales Talks, CEO Says

 Moly Mines Ltd., seeking to build a A$604 million ($511 million) molybdenum mine in Australia, is in talks with Chinese groups for iron ore sales accords from an adjoining deposit amid surging demand.

“We are getting a knock on the door from a Chinese party about once a week now,” Derek Fisher, managing director of the Perth-based company, said today by phone from Kalgoorlie, Western Australia. “We are getting a fair amount of attention particularly from the smaller to intermediate mills.”

Moly surged 55 percent Sydney in trading this week after yesterday announcing plans to start output by the first quarter of next year from an iron ore mine being developed at Spinifex Ridge in Western Australia. China, the world’s biggest buyer of iron ore, is securing supplies to feed demand from steel mills.

“We will have something signed off in the next few weeks,” Fisher said, adding that he’s meeting with a Chinese group today at the annual Diggers and Dealers Conference. Sales contracts may include an equity stake in the company, he said.

Moly jumped 24 percent to 81.5 cents at 1:11 p.m. Sydney time. The company is seeking to produce 1 million tons of the iron ore annually from the A$20 million mine, Fisher said.

The company delayed starting its Spinifex Ridge molybdenum mine last year as the worst credit crisis since the Great Depression froze lending and curbed demand for the metal used in steelmaking. A rebound in prices and a thawing of the debt market may help the company secure mine financing, Fisher said.

“These are the sort of moly prices we believe the project is financeable at,” he said. “We’ve got to wait for the debt market to come back but it’s looking pretty favorable.”

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