Sichuan Hanlong Group gained majority control of Australia's biggest molybdenum mine for US$200 million in what was the biggest investment in that country by a privately owned Chinese company, the firm said yesterday.

The Australian Foreign Investment Review Board has no objections to the proposal, under which Hanlong Group will take a 55.3 percent stake in Moly Mines through its Australian subsidiary, Hanlong Mining Investment Pty Ltd, the two companies said in separate statements on their Websites.

The deal is still pending the approval of Moly Mines shareholders and the Chinese authorities. A shareholders' meeting to approve the Hanlong transaction will be held on December 16.

Under the agreement signed by the two sides on October 19, Hanlong will provide US$500 million in project financing by June 30, 2010, to develop the Spinifex Ridge Molybdenum Copper mine, which is wholly owned by Moly Mines.

"The Spinifex Ridge project has very good prospects. Based on the current molybdenum price, sales could total 10 billion yuan (US$1.5 billion) with 2 billion yuan profit when the project starts operating three years later," Hanlong said.

The project, located in Western Australia, is the only large-scale molybdenum and copper resource to be discovered worldwide since 1982. The project has currently confirmed reserves of 350,000 tons of molybdenum and 500,000 tons of copper and there is further potential of finding more reserves and copper. Molybdenum is used in the making of steel.

"The project is also a huge iron mine with reserves of 1 billion tons. The average content (of the iron) could reach at least 40 percent," Hanlong said.

Moly Mines CEO and Managing Director Derek Fisher commented in its statement that the deal "is a great outcome for our shareholders and for Australia in general, as it is Hanlong's intention to immediately organize the financing for the development of our Spinifex Ridge molybdenum mine."

The project is the second major overseas acquisition for Hanlong following its investment in mining exploration in Africa. Hanlong has wide ranging investments including electricity production, infrastructure development and mining resources.