Markets

During 2006, Grange Resources contacted or visited pellet consumers in the competitive sea freight proximity of Kemaman. Figure 7 shows the location of potential consumers and highlights the freight advantage of Kemaman which can be summarised as follows:

• South East Asian DR pellet consumers within one days sailing of Kemaman. Perwaja Steel is located adjacent to the pellet plant and could be serviced by road or an overland conveyor.
• Middle East DR pellet consumers with sea freight of approximately US$7.7/t in panamax vessels.
• North Asian BF pellet consumers with sea freight of approximately US$5.7/t in panamax vessels.
• Chinese BF pellet consumers, located on the Yangtze River at US$12.7/t in handymax vessels.
• Australian BF pellet consumers with sea freight of approximately US$6.0/t in panamax vessels.
  

These freight costs compare to current long term pellet supply freight costs - mostly from Brazil - of approximately US$20/t. Spot freight costs from Brazil can be significantly higher than these long term costs.

Additional market potential is being investigated in Indonesia, Thailand and India.

Figure 7: Projected iron ore pellet markets for the Kemaman Pellet Plant