The Australian regulator has approved China's state owned enterprise Wuhan Iron & Steel's (WISCO) proposal to invest A$271 million ($247 million) in iron ore explorer Centrex Metals.
The approval granted today by Australia's Foreign Investment Review Board (FIRB) allows WISCO to take 60-per cent stake in the iron ore rights to five Centrex-owned tenements on South Australia's southern Eyre Peninsula as well as a 15 per cent stake in Centrex through a placement of 40 million new shares at a heavily discounted price of 25 cents per share and a board seat in Centrex.
Centrex and its subsidiary South Australian Iron Ore Group Pty Ltd are the registered holder of a number of exploration licences covering an area of over 2,000 kms of known iron ore deposits and prospects on Eyre Peninsula of South Australia.
Apart from the $271 million investment, Centrex and WISCO will form another 50:50 joint venture to develop a deep water minerals and general export port facility at Sheep Hill, north of Port Lincoln.
WISCO will solely fund the first A$75 million of work commitments into the joint venture to cover exploration and study costs
The joint venture plans to develop two, five million tonnes a year magnetite iron ore projects from magnetite deposits north of Port Lincoln on the foot of SA's Eyre Peninsula. The two mines are expected to come on line over the next five to seven years.