Felipe Bittencourt: To act as reliable link and broker between Brazilian iron ore suppliers and potential Chinese stakeholders in the sector.

Asian Metal: Dear sir, many thanks for your visit to Asian Metal. Could you please make a brief introduction of your company?

Felipe: First of all, I’d like to thank you for the opportunity to visit Asian Metal. Ever since the beginning of our contact you’ve always been really supportive and our group is keen on strengthening our relations, building a deeper connection in the near future. I am the CEO of LPR Trading Co., Ltd, a group that has been running since 1991, so we have over 20 years of experience in trade business and we’ve forged strong partnerships in many countries in Asia, meaning we have suppliers in China, India, Indonesia, Turkey and many others. One of the best features of our Group is how innovative we can be. We don’t rest on our oars; we’re always seeking for new goals.

Asian Metal: Could you give a simple description of the process involved in exploiting, upgrading and processing the product?

Felipe: In 2010, we initiated research on recycling of waste originated from the concentration of phosphate and whose composition made by SGS demonstrated high levels of Magnetite, around 50% of Fe. Our material is available without having to go through the whole mining procedure; however we need to improve the material. We signed a four-year contract with Vale with mandate to purchasing 1 million tonnes per year. The grade is around 50% and we are installing machines to transform this material into Magnetite Fe 63% to 67% Pellet Feed. So basically, our iron ore reaches high concentration of magnetite going through three different processes: magnetic separation, grinding and flotation. Moreover, the magnetite has advantage through Hematite because it has lower fusion point, which saves on energy cost. We have a total volume of 4 Million tonnes to process, and we are also interested in setting up contracts for future exportations, covering the rest of the year.

Asian Metal: Of the 65%min grade iron ore that you are going to supply to overseas buyers, does your product have any leverage over other grades of iron ore in the market?

Felipe: Our product is characterized by its high concentration of magnetite, starting at 63% and reaching 67%, so what we provide is one of the best pellet feed with high concentration of magnetite now available in Brazil, but at very competitive costs. This is how we intend to enter the Chinese market, offering an excellent product at irresistible quotations. Apart from our main project, which shall start shipping only by end of the year, we also can seek material in Brazil for ready shipments, with our various other partner sources, or develop new mining projects.

Asian Metal: How many tons can you provide per month? Is the 4 million tons you mentioned your installed capacity or actual output? Do you have any plans of expanding scale of production in the next five years?

Felipe: We’re considering exporting about 60,000tpm for the next 5 years, and we do have intention to increase production volume to attract more reliable buyers to cooperate. Besides, pig iron is also a product that we are strongly interested in expanding our business.

Asian Metal: What are your comments on the global iron ore price fluctuations in 2012?

Felipe: As in many other industries, iron ore is a dynamic field, so price fluctuation is expected and we all must be ready for its ups and downs. The iron ore export price was unprofitable in 2012, so some miners in Brazil scaled down operating capacity during that sluggish period as few of the miners can bear the low market price. For the time being most suppliers are cautious in their pricing and production policies instead of offering quotations blindly. The raw material market is so dynamic and no one can predict precisely what will happen, and we will keep monitoring market.

Asian Metal: What is your expectation of the demand for iron ore from Chinese end-user industries, and how do you intend to establish your brand in the competitive and fierce Chinese market?

Felipe: China is the well-known largest iron ore import country throughout the world, so I want to set up a harmonious and long-term relationship with Chinese buyers. I hope the demand from Chinese downstream industries can be stimulated truly in 2013. Speaking of getting into Chinese market, our plan is to understand what the market needs so we can provide the most specific requirements to suit it the best. And by that, I can tell you that our goal is to provide a personalized service, focusing especially on our buyer’s preconditions.

Asian Metal: Do you have market forecasts and expectations for iron ore market performance in 2013?

Felipe: Because of last year’s market behavior, we’ve had to deal with many speculations about iron ore market performance for this year. The way we see it, any reference to past performance is not indicative of future results, so we are optimistic for the coming months. During 2012 we have seen the prices soared to USD120/dt CFR China levels, which makes the Chinese local material less competitive. Due to this reason, and the necessities to build up stocks for 2013, we expect the iron ore to fluctuate between USD145/dt CFR China to USD150/dt CFR China.