Nanjing Steel to acquire stake in British iron ore miner
Shanghai. May 18. INTERFAX-CHINA - Nanjing Iron Steel Co. Ltd. (Nanjing Steel) announced May 18 it will purchase a 10 percent stake in British Virgin Islands-based All Wealthy Capital Ltd. for $50 million.
All Wealthy Capital Ltd. is involved in the exploration, mining and processing of iron ore in Malaysia, according to the announcement. It holds a 70 percent stake in a Malaysian iron ore project, which includes within its limits the mining company Mount Megakey Sdn. Bhd., a processing facility named Phoenix Lake Sdn.Bhd. and a trading company, Grace Wise Pte. Ltd.
Nanjing Steel's fully-owned subsidiary Nanjing Iron Steel Group International Trade Co. Ltd., meanwhile, signed a 10-year iron ore off-take agreement with Grace Wise Pte. Ltd, the announcement added.
Under the terms of the agreement, Nanjing Steel will purchase one million tons of iron ore throughout the period of June 1, 2011 to May 31, 2012. This will then increase to two million tons each year. For the first five years of the contract, the iron ore price will be $3 below the Malaysian spot price, or approximately five percent cheaper than Indian iron ore grading 63.5 percent. Iron ore prices for the remaining five years will be negotiated at a later date.
-XH