#26
Post
by rhino » Wed Jul 29, 2009 4:56 pm
China's Wuhan Iron and Steel Co to invest in two SA mines
CAMERON ENGLAND, CHIEF BUSINESS REPORTER
July 21, 2009 01:30pm
A CHINESE company has agreed to invest up to $186 million in two SA iron ore mines, in a move which will create hundreds of jobs for up to 40 years.
In a sign that at least for some companies, the China-Australia resources compact remains on track, Wuhan Iron and Steel Co. (WISCO) has signed a formal agreement to develop the projects north of Port Lincoln.
The deal, which had been previously announced, but not formally signed, will pay Centrex a minimum of $78 million, with the remainder paid when the Adelaide company meets certain benchmarks.
Wuhan will receive a 60 per cent stake for its investment.
In a separate agreement, WISCO and Centrex will set up a joint venture to develop a deep water port at Sheep Hill, north of Port Lincoln, to export the iron ore.
Centrex is currently awaiting approval from the Development Assessment Commission to build a bulk handling facility to export ore from a separate mine at Wilgerup on the Peninsula, via the Port Lincoln wharf.
This plan, which is unrelated to the WISCO deal, has created controversy among some members of the Port Lincoln community, who believe it could threaten the town's aquaculture industry.
The business relationship between Australia and China has been strained in recent weeks, following the arrest of Rio Tinto executive Stern Hu on suspicion of espionage, and bribing steel mills for sensitive commercial information.
Centrex chairman David Lindh said in a statement that Centrex and WISCO had a close and transparent relationship.
"The joint venture is an extraordinary vote of confidence by our Chinese partners in the re-emergence of an invigorated iron ore industry on Eyre Peninsula,'' Mr Lindh said.
"The signing is even more significant against the current tensions within the global sea traded iron ore market where negotiations over price and alliances, publicly exhibit evidence of strain.
"We applaud our Chinese partners for their due diligence on Centrex and willingness to work harmoniously with us to achieve a commercial outcome that is long-term, solid and is in its own right, a benchmark for what can be achieved between Australia and China.''
After discovering enough iron ore resources, Centrex plans to start two iron ore mines, each exporting five million tonnes per year.
The deal requires approval from Australia's Foreign Investment Review Board and China's National Development Reform Commission.
cheers,
Rhino