Chinese firm acquires stakes in two Australian mining FearrAus
09 Sep 2009
Chinese state-owned firm China Railway Materials Commercial Corp has taken a small stake in Australian iron ore explorer FerrAus and United Minerals, in what is being seen as a strategic alliance to further China's interests in Australia's minerals sector.
Under the agreement announced on Tuesday, China Railway Materials will take a 12-per cent stake in FerrAus and undertake to help build facilities to transport FerrAus's resources in the eastern Pilbara to the west coast for export.
In another deal, Pilbara iron ore developer United Minerals Corporation has agreed to a $27.2 million share placement to China Railway Materials. China Railways will receive 20 million shares in UMC at $1.35 a share and after the placement the company will hold 11.38 per cent of UMC.
The company will also be issued with 2 million attaching 2011 options with an issue price of 10 cents a share that can be exercised at $1.35 per share.
The capital raising comes with the condition of a 10 year, 3 million tonnes per annum offtake agreement with China Railways from the iron ore deposit in the Pilbara.
According to Matthew Hogan CEO of United Mining the agreement with China Railways would prove pivotal for the company and the development of its Railway Iron Ore Deposit in Western Australia.
He added that funds from the capital raising would enable the Railway Iron Ore Deposit to be advanced towards production.