July 18 (Bloomberg) -- Marubeni Corp., Japan’s biggest power and agricultural products trading company, said it bought the 2.5 percent of Australia’s Roy Hill iron ore project held by South Korea’s STX Corp.
The purchase raises the Japanese trader’s stake in the A$10 billion ($9.17 billion) project led by Australian billionaire Gina Rinehart’s Hancock Prospecting Pty to 15 percent, a Tokyo-based Marubeni spokeswoman said by phone, declining to be named in line with corporate policy.
Marubeni said in March last year it agreed to pay A$1.5 billion for 12.5 percent of Roy Hill in its first foray into iron ore mining in 30 years. STX spent A$300 million on its 2.5 percent stake, the company said at the same time, while South Korean steel producer Posco bought 15 percent.
Hancock Prospecting, which owns the remaining 70 percent of the project, plans to produce 55 million metric tons a year at Roy Hill over 28 years.
The project in the Pilbara region, due to start in 2014, has “unbelievable” break-even costs and would be an exception to Marubeni’s strategy of slowing investment in Australian resources, Chairman Teruo Asada said in an interview July 16.
STX agreed to sell its entire stake in Roy Hill, according to a regulatory filing on June 28.
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