Baosteel to take a 15% stake in Aquila Resources

Baosteel Group has agreed to take a 15% stake in Australia’s Aquila Resources to help speed up development of the company’s iron-ore, coal and manganese projects, the Wall Street Journal reported. Baosteel will invest up to US$240.4 billion in the miner via a placement of 43.95 million shares at A$6.50 (US$5.46) each. The deal would make Baosteel Aquila’s second-largest shareholder and be the mill’s first direct investment in an Australian company. The steel mill formed a joint venture with Fortescue Metals Group in 2007. The deal is seen as another test of Australia’s Foreign Investment Review Board (FIRB). Analysts said the FIRB is expected to approve the investment due to its relatively small size. Aquila’s West Pilbara iron-ore project is set to conclude a feasibility study by 2010, and move to production by 2013, with annual projected output of 30 million to 40 million metric tons. Aquila’s other interests include the Thabazimbi iron-ore and Avontuur manganese assets in South Africa, and interests in three coal projects in Australia’s Queensland state.