Melbourne (Platts)--6Dec2012/406 am EST/906 GMT

Australia's Crusader Resources plans to start production at its Posse iron ore project in Brazil in 2013 after it received an operating license from local authorities, a company official said Thursday.

The license allows the production of 300,000 mt/year of run-of-mine ore using dry beneficiation. Crusader intends to obtain a full mining license next year and increase production to 1 million mt/year.

The Posse project, which has a mine and processing plant ready, is located in a region where there are over 100 pig iron plants within 20 km and six major steel mills within 30 km, the official said.

"All the iron ore will be consumed locally and Crusader has agreements in place to sell at mine gate," the official said.

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Demand for iron ore in Brazil's domestic market has not been impacted heavily by the slowdown that has engulfed world markets, and the official said that once production begins the iron ore would be stocked at the mine gate and be trucked to nearby facilities.

The Posse iron ore project, which is located 30 km from Belo Horizonte, is expected to have a mine life of six-eight years.

--Marnie Hobson, marnie_hobson@platts.com --Edited by Elston Soares, elston_soares@platts.com

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