Sinosteel to Buy Iron Ore From Brockman's Marillana Project in Australia
Sinosteel Corp., China’s biggest iron-ore trader, agreed to buy future production of the steelmaking ingredient from Brockman Resources Ltd., extending its links with Australia.
Sinosteel signed an initial accord to buy as much as 10 million metric tons a year, or 50 percent of planned production, from Brockman’s Marillana project in the Pilbara region, the Perth-based company said today in a statement. The agreement “allows for wider strategic investment discussions between the two groups,” it said.
The Chinese state-owned company paid A$1.4 billion ($1.3 billion) for Midwest Corp. in 2008 and has a stake in the Rio Tinto Group-operated Channar mine. Sinosteel in June won approval to mine ore at Koolanooka in Western Australia.
“Our company is keen to cooperate and partner with Australian companies with credible projects seeking to leverage our capability to supply raw materials for China’s steel industry, whether this is iron ore, manganese, chrome ore or coal,” the statement cited Li Ying, Sinosteel’s managing director in Australia, as saying.
Brockman shares rose as much as 7.7 percent to a 10-year high and at 2:49 p.m. in Sydney today were 0.3 percent higher at A$3.77, giving the company a market value of A$525 million.
To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net