Aug. 31 (Bloomberg) -- Baosteel Group Corp., China’s second-largest steelmaker, said it secured a credit line of $10 billion from China Development Bank Corp. to fund expansions.
Baosteel Chairman Xu Lejiang and China Development Bank Chairman Chen Yuan attended a signing ceremony in Beijing today, the Shanghai-based steelmaker said today on its website.
The loan will help Baosteel “pursue resource acquisitions and expansion abroad, as well as domestic mergers,” the statement said.
Baosteel and Wuhan Iron & Steel Group are seeking resource investments as mining companies take advantage of the economic recovery to raise prices. Baosteel is in talks with PT Aneka Tambang, an Indonesian nickel producer, to build a ferronickel plant in the country, Xu said in July.
Baosteel last year agreed to buy a 15 percent stake in Aquila Resources Ltd., which is planning to develop iron ore projects in Australia, for A$285 million ($253 million). The Chinese company in June agreed to develop coking coal mines with a Chinese partner to secure supplies in China.
Vale SA, BHP Billiton Ltd. and Rio Tinto Group, the biggest exporters of iron ore, this year abandoned a 40-year custom of annual contracts in favor of quarterly agreements as they bet on rising prices.
China, the world’s biggest buyer of iron ore, should reduce supplies by foreign companies to just one-third of its requirements by 2015 by boosting domestic output and investing overseas, the China Iron & Steel Association said on July 30.
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