Taiwan's largest steelmaker China Steel Corporation (CSC) has announced it has bought a 2.5 percent stake in the Roy Hill iron ore project in Western Australia from South Korean steel producer POSCO.
POSCO had announced earlier this year that it had paid $1.5 billion to increase its stake in the project to 15 percent. POSCO's stake will now decline to 12.5 percent. Other partners in the project include Japanese trading house Marubeni with a 12.5 percent stake and South Korea-based STX Corp with 2.5 percent, while Australia-based Hancock Prospecting retains a majority stake of 70 percent.
In its statement, CSC said the A$305.2 million it paid for its 2.5 percent stake will "be funded as equity into RHH [Roy Hill Holdings] to meet the project's development cost."
CSC will be entitled to 1.38 million metric tons of iron ore per year from Roy Hill,
The Roy Hill iron ore project is due to begin production in 2014, while its expected annual output is 55 million metric tons of iron ore.
The acquisition by CSC is subject to approvals from both the Australian and Taiwanese authorities.