Wuhan Steel agrees to 10m tpy iron ore jv with Centrex
Major Chinese mill Wuhan Steel has signed a formal agreement with Centrex Metals to jointly develop two 5 million tpy magnetite iron ore projects in south Australia.
Wuhan Steel has promised to pay A$186 million ($151 million) in separate stages to secure 60% of the joint venture, with the remaining 40% belonging to Centrex, in an agreement subject to approval from the Australian Foreign Investment Review and China’s National Development Reform Commission.
The two magnetite ore mines, located north of Port Lincoln, are expected to produce concentrate over the next five to seven years.Centrex also wholly owns the Wilgerup haematitie iron ore mine north of the joint venture.
Wuhan Steel's investment will help fund Wilgerup, which is expected to start mining before year's end.Both parties have also agreed to form a second 50:50 joint venture focusing on deep water minerals and port facilities at Sheep Hill, also north of Port Lincoln.In addition to the direct cash investment, the steel mill will buy A$10.09 million worthof shares in Centrex at A$0.25 per piece.
Wuhan Steel, China's third largest group, is based in Wuhan city, Hubei province. It has an annual crude steel capacity of 30 million tpy.
Centrex owns 14 prospective iron ore exploration licences on the Eyre Peninsula, covering more than 2,000 sq km.
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