Wuhan Iron and Steel Corp., parent of Wugang, will invest 180 million Australian dollars (or 127 million US dollars) to jointly exploit iron ore resources in south-central Australia with the local company Centrex Metals Ltd. (CXM).
The two sides have recently signed a framework agreement, under which the two will set up a joint venture and each holds 50 percent shares. The joint venture will exploit 11 iron ore areas in Eyre Peninsula, with an estimated deposit of 2 billion tons.
Besides, CXM will sell 15 percent shares to Wugang at a price of 0.25 Australian dollars per share. As a result, Wugang will become the second largest shareholder of CXM and owns a seat on the latter's board.
Under the agreement, the two sides will jointly build a deepwater port 60 kilometers away from the mine area, for exporting products.
According to Wugang's general manager Deng Qilin, Wugang will form an annual steel production capacity of 50 million tons in the next few years, but the company only yields 4.5 million tons of iron ores per year, far from its annual demand of 80 million tons.
Deng also said, Wugang will accelerate its pace in building iron ore bases at abroad in the next few years.
Australian CXM, a local listing iron ore producer, is mainly engaged in production of hematite and magnetite, with a licensed exploration area of over 2000 square kilometers.
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