Iron Mining Group (OTCBB: IRNN) in Mexico - Current Play in Metals
Benjamin Shepherd and Yiannis G. Mostrous, Associate Editors of Personal Finance, had an intersting article this morning on ETFs fronting the top emerging-markets miners and second-tier gold producers, leveraged to the rising price of bullion. In their article at The Money Show.com, they stated:
"Hard assets are quickly becoming hot commodities among investors. The Chinese economy posted strong growth in 2009, leading to a 25% increase in steel consumption, a 42% jump in iron ore imports and a similar rise in imports of coal. The trend will continue this year and in 2011.
Furthermore, India’s economy will soon receive the same media attention lavished upon China. The world’s largest democracy has seen its economic growth gradually catch up to China’s. This means that commodities prices will rise again, once market participants realize the true potential of India’s economy and its implications for commodities demand."
Last week, Iron Mining Group (OTCBB: IRNN) announced their move into Mexico - "Iron Mining Group to Launch IMG Mexico, Expand into Mexican Iron Ore Market" to further grow their capacity to tap into China.
Iron Mining Group Mexico (“IMG Mexico”) was formed to explore iron ore mining, investment and trade opportunities in Mexico. The launch of IMG Mexico coincides with a Letter of Intent signed on November 22, 2010 for a joint venture investment into a junior iron ore mine resulting in an annual supply guaranty of 700,000 metric tons of high-grade iron ore for export to China against IMG’s existing Chinese sales contracts.
Here Eric Li, Senior Vice President of CBI China speaks about how China's iron ore demand was affected by 2009's downturn and what we can expect to see from China in 2010 and beyond:
IMG anticipates taking daily delivery of iron ore beginning in December 2010 and projects exporting its first 70,000 metric ton shipment from Mexico to China by February 2011, with subsequent ships leaving approximately every five weeks for a total of 700,000 metric tons delivered within the first year.
IRNN's management team will be based in Guadalajara, Mexico. Management has identified further investment targets allowing for increases in total monthly iron ore exports to greater than 500,000 metric tons by Q4 2011.
IRNN's CEO, Garrett K. Krause stated:
“Similar to our mining activities in Chile, we believe that there exists a substantial opportunity to make strategic joint venture investments in Mexico to gain access to attractive iron ore deposits. With IMG’s established Chinese buying demand, and with our ever-growing relationships in Mexico, we are uniquely positioned to act as a joint venture partner and solution provider to these otherwise restricted miners. Further, because Mexico has available port mineral loading terminals capable of handling Panamax ships, we can imminently begin exporting from this region at competitive shipping rates.”
Iron Mining Group, Inc., is a global iron ore mining company with its initial focus in Latin America. The Company has entered this marketplace at a time when the largest iron ore customer, China, seeks to alter the status quo by shifting power away from the traditional iron ore producers. Iron Mining Group has signed strategic joint venture agreements with several Chinese Steel Groups, which provide guaranteed long-term iron ore purchase agreements for 100% of available production.
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