Domestic

Baosteel buys 15% stake in Aussie miner

(Xinhua)
Updated: 2009-11-24 09:16

Baosteel Group, China's leading steelmaker, announced on Monday its acquisition of 15 percent stake in Aquila Resources, an Australian iron ore and coal company.

The A$286 million ($265 million) has made Baosteel the second largest shareholder of Aquila, said the Chinese company based in Shanghai.

The transaction is an important strategy for Baosteel's overseas expansion by securing long-term supply of critical raw materials for its steel making business, said the company.

The deal will help the Australian company source low-cost financing from Chinese institutions to support its projects.

Tony Poli, executive chairman of Aquila said on the company website, "The company now looks forward to developing its relations with Baosteel to the mutual benefit of both companies."

The deal was approved on Nov 13 by China's top economic regulator, the National Development and Reform Commission and it was Baosteel's first large strategic investment in a foreign public company.

The two companies signed an agreement on the acquisition in August this year and got nod in October by Australia's Foreign Investment Review Board,which limited Baosteel's stake in the Australian company to the utmost 19.9 percent.

Under the terms of the deal, Dai Zhihao, a vice president of Baosteel, will step in as a board member of the Australian coalminer.