Wuhan Iron & Steel (Group) Corp (WISCO), one of the largest steelmakers in the country, has finalized the terms of a US$240 million investment agreement with Consolidated Thompson Iron Mines of Canada.

According to the agreement, WISCO will buy 38.7 million common shares of the Canadian company at a price of CUS$2.72 per share, which represents a 19.99 percent stake in the company. Consolidated Thompson will receive aggregate proceeds of CUS$105.2 million.

The two companies will also establish a limited partnership in which WISCO will hold a 25 percent interest and to which Consolidated Thompson will contribute its Bloom Lake property. Located in Duplessis County in Quebec, Bloom Lake is a development-stage iron ore project with a 34-year mining life.

The move is expected to help WISCO secure its overseas iron ore supply at a time when the country's steel industry is largely depending on the world's top three iron ore miners, BHP, Rio Tinto and Vale.

Richard Quesnel, president and CEO of the Canadian miner, expected the agreement to help the company offset debt and provide it with more financial flexibility.

"This partnership with one of China's largest and most technologically advanced integrated steel groups also strengthens Consolidated Thompson's potential to expand from the current mine plan of 8 million tons per year to 16 million tons of annual production of iron ore, if such expanded scenario is deemed economic, and we believe that it positions us as a significant future iron ore producer with quality, low cost assets in Quebec," he said.

Meanwhile, China Minmetals' bid for Australia's OZ Minerals may face some challenges from Australian bank Macquarie, the Australian media reported yesterday.

Macquarie Group is set to offer a new AUS$1.4 billion proposal to recapitalize OZ Minerals, the Australian Financial Review said, just a day before OZ shareholders were to vote on the Minmetals' deal.

However, OZ Minerals said it had not received any new offers other than those it had already rejected as inferior to its US$1.2 billion deal to sell most of its assets to Minmetals.

(China Daily June 11, 2009)