Chile’s biggest steel and iron-ore producer to invest US$700 million this year
Chile’s Compañía de Acero del Pacífico (CAP) will invest nearly US$700 million this year to develop its iron ore projects in the country, president Roberto de Andraca said, reports local financial newspaper Estrategia.
However, the executive warned reporters that plans to expand CAP’s mines in Chile may be delayed by electricity shortages, since power supply in Chile has become a problem. That’s why, on Tuesday, BHP Billiton (NYSE, ASX: BHP), the world’s largest mining company, urged Chilean authorities to find ways to increase power sources, reported Bloomberg:
While BHP has enough power for its Chilean operations until 2015 and can supply the initial expansion of its Escondida copper mine, the company is looking to secure more supplies after that, the company’s Base Metals President Peter Beaven told reporters in Santiago.
Iron ore prices will probably remain near first-quarter levels in the short term, but later fall to around $100 per tonne, De Andraca added.
Iron ore with 62% iron content closed the first quarter at $147.60 a tonne, based on data from reference price provider the Steel Index.
“For this year, we’re looking at prices similar to the first quarter of $148 per tonne,” said De Andraca.
CAP expects its sales to grow by at least 5% this year.
The company’s revenue jumped 39.8% to $2.79 billion in 2011.