China’s Hebei Steel, Australian company Richmond Mining, and its US subsidiary Nevada Iron have signed a JV to develop Buena Vista iron ore mine in Nevada, USA.

The Buena Vista magnetite iron ore reserves are estimated at 400Mt and is cheaper to exploit compared to those in Australia due to its proximity to nearby railway and ports.

Once the new company successfully obtains $161M in financing, Hebei Steel would be entitled to 80% of its iron ore production, with the preferred option for the remaining 20%.

With all options exercised, Hebei Steel will be holding 19.9% of Richmond Mining. Managing Director Max Nind of Richmond Mining said Buena Vista mine is expected to start operation in Q4 2012.

Hebei Steel’s iron ore self-sufficiency rate is less than 20% as of 2010. The group plans to annually add 5Mt to the amount of its self-sufficient iron ores, and gradually bring the figure to 35% by 2015.

In a related development, Hebei Steel has completed restructuring nine privately-owned local miners in Dawan mining areas in Laiyuan county in Hebei province. Hebei Steel expects to mine 1Mt of iron ore in Laiyuan between 2011-15.

Source: China Metals e-mail