Chinese steelmaker Chongqing Steel has received approval from both the Chinese National Development and Reform Commission and also from the Australian authorities for its acquisition of an Australian mine owned by Hong Kong-registered Asia Steel Holdings Limited .
Seeking to ensure sufficient iron ore supplies for Chongqing Steel, in November last year Chongqing Minerals Development and Investment Co., Ltd signed a framework agreement with SINOM (Hong Kong) Limited and its wholly-owned subsidiary Asia Steel Holdings Limited. According to the deal, Chongqing Steel will invest US$258 million (RMB 1.75 billion) in Asia Steel, and Chongqing Steel will receive 60 percent of Asia Steel's additional shares.
In relation to the acquisition, Chongqing Steel's management said that, upon the purchase of the Australian iron mine, supplies will be directed continuously to Chongqing Steel's new Changshou mill, so as to establish a super-size steelmaker. With the Australian mine and five mines in three provinces in China, the management said Chongqing Steel will be self-sufficient in iron ore and will not need to worry about the overseas iron ore giants.