China Railway Materials Commercial Corp (CRM) is to buy minority stakes in two Australian iron ore prospectors for A$39.8 million (US$34 million) to secure future supplies for steel making.
Meanwhile, Australia's Uranium Metals Ltd said yesterday it had received an A$83.6 million cash offer from China Guangdong Nuclear Power Holding Co for a 70 percent stake in the company.
CRM has agreed to acquire an 11.38 percent stake in United Minerals Corp for A$27.2 million and a 12 percent stake in FerrAus Ltd for A$12.6 million, according to separate statements released by the two Australian companies yesterday.
The deals reflect further efforts by China to undercut the monopoly in global iron ore supplies by investing in smaller miners.
Analysts said the deals should face less Australian regulatory scrutiny given their small size compared to other deals under review.
In addition, the Uranium Metals deal only involved a small portion of Australia's uranium deposit.
Australia's Foreign Investment Review Board is still reviewing a proposed A$3.54 billion takeover of Felix Resources Ltd by China's Yanzhou Coal Mining Co, and has delayed ruling on a A$252 million Chinese investment in rare-earth miner Lynas Corp, which would strengthen China's hold on the world's supply of such minerals for which China is already the top producer.
Beijing-based CRM is one of the top three steel buyers in China.
Its activities involve the manufacturing of railway materials, rolling stock and other railway construction materials.
Both agreements released yesterday include talks for sales accords for future ore output.
CRM and FerrAus agreed to study the development of projects in Western Australia, and the Chinese company will also help FerrAus secure financing for project construction.
"FerrAus has one of the most promising iron ore resources in the region and is well positioned for consolidation of the region," Song Yufang, CRM's president, said in the FerrAus statement.
(Shanghai Daily September 9, 2009)
