Hanlong Mining Investment Pty Limited signed?in Hong Kong?Monday a subscription agreement with Australia's Moly Mines Limited to become the controlling shareholder of the Australian company.
Hanlong Mining Investment Pty Limited is an Australian subsidiary company wholly owned by a privately run Chinese corporation -- Sichuan Hanlong Group Ltd.
Following a $200-million investment into Moly Mines' stock, Hanlong will become the controlling shareholder with a 55.3 percent shareholding in the company.
Hanlong will also provide $500 million in the form of project finance for the development of the world class SpinifexRidge Molybdenum Copper mine, which is wholly owned by Moly Mines.
The investment will require final approval from the Australian Foreign Investment Review Board and relevant Chinese authorities prior to completion.
This acquisition is the second major overseas acquisition for Hanlong Group, which previously invested in mining development in Africa.
Hanlong Group Board of Directors Representative Liu Han said it is extremely meaningful for a privately held Chinese company to have gained authority to develop a mine in Australia.
Liu said that they have already communicated with Australian government and he is confident that the project will be carried out successfully.
Moly Mines's Chief Operating Officer Collis Thorp said the project is ready to develop as most of the engineering and budget work have been done.
"It would take us 18 months to 21 months to construct the mine and this agreement will facilitate that," Thorp said that in two years the project should be in full production.
Sichuan Hanlong Group Limited has a wide portfolio of investments including electricity production, infrastructure development, mining resources development, pharmaceutical production, food and alcoholic beverages and some other ones.
Moly Mines Limited is dual listed on the Australian Stock Exchange and the Toronto Stock Exchange and wholly owns the Spinifex Ridge Molybdenum Project located in Western Australia.
The project is the only large-scale molybdenum and copper resource to be discovered worldwide since 1982. Currently confirmed reserves are 350,000 tons of molybdenum and 500,000 tons of copper with further potential for increasing these figures.