Saw this posted in the BCI thread, and I thought it was interesting since TRF/IFE have had dealings with Wuhan Iron and Steel Corporation. - See announcements around Nov 2008.
China entering into strategic tie-ups with Australian iron ore miners. But, with inflation raising its head, demand is tapering off and India is worried about losing ground. Author: Shivom Seth Posted: Monday , 12 Jul 2010 MUMBAI - For the third year running, China's appetite for foreign iron ore appears to have cooled off in June. Though the trend is expected to affect the half year earnings of majors BHP Billion and Rio Tinto, whose results are due next month, a little known fact is that China continues to sew up deals to develop iron ore mines in Australia. Over the weekend, China's third largest steel maker, Wuhan Iron and Steel Corporation entered into a joint venture with the Australian Centrex Metals Ltd (CXM) to develop iron ore mines on south Australia's Eyre Peninsula, which ostensibly has deposits of 2.282 billion tonnes of iron ore. While the Chinese firm paid A$ 51.5 million (US$ 43.7 million) to CXM for mineral exploitation rights, it also paid another A$ 50 million to cover the cost of the first-phase of exploration. With an estimated investment of US$ 1.5 billion, the project is expected to annually produce 33 million tonnes of raw iron ore. Another South Australian miner, IMX Resources Limited recently received final approval enabling Chinese firm, Sichuan Taifeng, to increase its stake in the company and invest in a South Australian iron ore, copper and gold mine. The Foreign Investment Review Board approved the investment by Sichuan Taifeng in IMX and the Cairn Hill project. Sichuan Taifeng is to acquire up to 19.9% of IMX immediately, and acquire 49% of Outback Iron Pty Ltd, the IMX subsidiary, which indirectly holds the Cairn Hill operations. Australia's largest iron ore pellet producer, Grange Resources, is also looking to China to bail it out. The firm is scouting debt funding from China to help finance a A$ 1.8 billion iron ore mine in Western Australia. The firm will be talking to financiers in China to shore up the debt finance. Reports indicate that Grange's largest shareholder, Jiangsu Shagang Group Co, China's biggest closely-held steelmaker, is to arrange debt for as much as 70% of the cost of the proposed Southdown mine. The mine is a joint venture with Japan's Sojitz Corp and is expected to start output toward the end of 2013.
TRF Price at posting:
48.5¢ Sentiment: LT Buy Disclosure: Held
