China’s largest steel maker has agreed to invest up to $285.6 million in Aquila Resources in order to fast track development of the company’s iron ore, coal and manganese projects.
Aquila and Baosteel Group Corporation agreed to a memorandum of strategic cooperation and a share subscription agreement last Friday.
Baosteel’s investment, which is subject to approval from the Foreign Investment Review Board, will be via a placement of up to 43.95 million shares at $6.50 each, which will give the Chinese state-owned company a 15% stake in the Australian company.
According to Aquila, the investment will allow it to begin the development of its assets.
“This placement will provide the company with significantly greater capacity to accelerate the development of its key, high quality, steel raw materials asset portfolio,” the company said.
“This is an important step in executing Aquila’s vision to become one of Australia’s leading globally diversified steel raw materials producers.”
The deal will also see Baosteel nominate an executive for a place on the Aquila board, with the company initially nominating vice-president Dai Zhihao.