Australia approves Baosteel stake in Aquila

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2009

China's largest steelmaker Baosteel Friday won approval to take a 285.6 million dollar (261.5 million US) stake in Aquila Resources, the Australian mining company said. Aquila said Australia's Foreign Investment Review Board (FIRB) had approved Baosteel to take up to 19.99 percent of shares in the company, up from the 15 percent initially agreed under the deal. "Subject to receipt of relevant Chinese regulatory approvals which have been sought by Baosteel, the company anticipates completion of the transaction in the latter half of November," Aquila said in a statement. The deal comes after Australia last week approved Yanzhou Coal's 3.5 billion dollar takeover of miner Felix, its biggest by a Chinese firm, as the Asian superpower seeks to secure raw material supplies to support its growth. Australia's vast mineral resources -- particularly iron ore and coal -- are keenly sought by Chinese companies and accounted for much of the 74 billion Australian dollars in trade between the countries last year. But the government has wrestled with the national security implications of foreign ownership of the resources industry, and has a preference for foreign state-owned companies to take minority stakes in domestic miners. Under the latest deal, Baosteel will be given preference to directly invest in most of Aquila's projects and will provide support in sourcing financing from Chinese institutions. The deal, under which Baosteel vice-president Dai Zhihao has been nominated to join Aquila's board, was approved by the Australian miner's shareholders on Wednesday. "Aquila looks forward to working closely with Baosteel and to fast-tracking the company's significant coal, iron ore and manganese projects," it said.

Source: AFP