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London: London Mining, the developer of iron ore mines, plans to produce as much as 20 million metric tonnes a year of the steelmaking raw material at its joint venture in Saudi Arabia.
The venture, Saudi London Iron, has been approved by the Saudi Arabian General Investment Authority, London Mining said on Friday.
A so-called bankable feasibility study for the first phase of five million tonnes a year is under way, the company said.
Saudi Advanced Production for Iron and Steel will buy all the output from the venture at a price based on the international iron-ore pellet price and a premium to reflect transport cost savings, London Mining said.
Iron ore prices have increased for a sixth successive year. Steelmakers around the world are paying a record amount for the raw material as mining companies struggle to keep pace with demand from Asian steel mills.
London Mining declined 0.7 kroner, or 2.2 per cent, to 31.6 kroner in Oslo trading at 11.42am local time.
The stock has gained 5.3 per cent this year, boosting the company's market value to 3.1 billion kroner ($560 million).
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