Mineral Resources Buys Baosteel Target Stake for Ore Project

Mineral Resources (MIN) Ltd. crashed a takeover by China’s Baosteel Group Corp. to get a seat at the table for the development of a A$7.4 billion ($6.9 billion) port, rail and mine project in Australia.

Mineral Resources, which today filed notice of its purchase of a 12.8 percent stake in takeover target Aquila Resources Ltd. (AQA), said it wants to ensure the project in Western Australia goes into production as soon as possible.

Baosteel, owner of China’s biggest listed steelmaker, and Aurizon Holdings Ltd. (AZJ) last month offered to buy Aquila in a deal that valued the Australian company at A$1.4 billion and that would give them a half stake in the West Pilbara project. Mineral Resources has developed a plan for the project, jointly owned by AMCI Inc., and is seeking talks with Aquila’s major shareholders, including Baosteel.

“We have the financial capacity to make a meaningful capital contribution towards the development,” Mineral Resources Managing Director Chris Ellison said in a statement.

Mineral Resources fell 4.3 percent to close at A$9.70 in Sydney trading, the lowest in 10 months. Aquila dropped 1.9 percent to A$3.54. The benchmark index declined 0.5 percent.

Baosteel and Aurizon have made a “full-value” bid for Aquila, Aurizon said today in an e-mail statement. “The offer gives shareholders certainty of value in contrast to remaining a shareholder of Aquila and facing the challenges of declining commodity markets, large capex financing, potentially dilutive capital raisings” and developing new projects.

Almost 50 million Aquila shares traded yesterday at A$3.75 a share. That’s 10 percent more than Baosteel and Aurizon’s cash bid of A$3.40 a share.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Andrew Hobbs, Madelene Pearson

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