BAOSTEEL CELEBRATES ACQUISITION OF STAKE IN AUST MINER AQUILA
AQLRF | Quote | Chart | News | PowerRating -- The Baosteel Group has held
ceremony in Beijing to mark its acquisition of a 15 per cent
stake in Australian coalminer and iron ore explorer Aquila
Resources (ASX:AQA), on Monday.
On August 28 this year, Baosteel and Aquila signed an
agreement for Baosteel to invest A$285.6 million (US$261.32
million) for a 15 per cent stake in Aquila.
At first, Baosteel's application was thwarted by the Foreign
Investment Review Board (FIRB) of Australia, but in late
October the deal finally got the approval from the Australian
regulator, which even allowed Baosteel the possibility of
increasing its stake in Aquila to 19.9 per cent in the
future.
On November 13, China's top economic regulator the National
Development and Reform Commission (NDRC) gave approval to the
investment, which is the first time that Baosteel has invested
directly in a foreign listed enterprise, though the company has
been investing overseas for many years.
Under the terms of the deal, Baosteel becomes Aquila's
second largest shareholder, and will send Dai Zhihao, a vice
general manager of Baosteel, to the Aquila board.
"We will develop at least five projects in the coming four
years, expecting to produce 20 million metric tons (tonnes) of
iron ores, 6 million tonnes of coal and 1 million tonnes of
manganese. With Baosteel's support, we are confident of
realizing that goal," said Tony Poli, president of Aquila.
Meanwhile, Aquila will not only have a channel to sell
products to Baosteel and other related Chinese enterprises, but
also get the assistance of Baosteel in sourcing low-cost
financing from Chinese institutions to underpin development of
its projects, Tony Poli told China Business News at the
ceremony.
The Baosteel Group Corporation, the top steel maker in
China, is the parent company of the Shanghai-listed Baosteel
(SSE:600019).
(XIC) rw
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