Steelmaker buys into Australian iron ore interests

Wuhan Iron & Steel will pay Centrex Metals up to US$127 million for a 50% stake in iron ore projects in Australia, Bloomberg reported. The Chinese company will also spend US$6.8 million on a 15% holding in Adelaide-based Centrex. Assuming the deal wins regulatory approval in both countries, Wuhan has agreed to hand over about a third of the US$127 million once it receives formal confirmation of its share in five tenements. Another installment will be paid in March 2010 with all subsequent payments coming on the condition that resource targets are reached. The two companies have also agreed to develop South Australia’s first deepwater export port on the Eyre Peninsula. Wuhan saw its net profit rise 40% to US$331 million in the third quarter.