China-focused Fortune Oil invests in iron ore mining in Armenia

Fortune Oil, the London-listed energy and natural resources company focused on China, has announced that it has entered into a strategic alliance with seven leading Chinese and international organizations to support its new metals and mining business.
 
The initial area of possible cooperation for the alliance partners will be the technical evaluation of the potential of the Hrazdan Iron Ore project in Armenia, which is one of three iron ore mines 72 percent controlled by Bounty Resources Armenia Ltd (BRAL).
 
Fortune, which paid $24 million in January this year to acquire a 35 percent share in BRAL, with an option to increase its equity interest to 50 percent for an additional $16 million, said that it aims to have the Hrazdan mine and iron ore concentration plant in commercial operation in the first half of 2013.
 
According to Fortune's development plan, the amount of iron ore concentrate produced at the Hrazdan mine, which contains high quality iron ore with 40 percent iron concentration, is planned to be between 800,000-1,000,000 mt per annum. The Hrazdan iron ore reserves of 77 million mt will be developed over a 15-year period, with iron ore to be exported by rail car to a major port in either Georgia, Turkey or Iran with the ultimate market being China.
 
The other two iron ore mines are located in the Armenian cities of Abovyan and Svarants and have proven, probable and inferred reserves of 255 million mt and 1.5 million mt respectively.
 
According to Armenian prime minister's press service, Fortune plans to invest about $500 million in developing and expanding these three Armenian iron mines.