On April 27, Chinese Premier Wen Jiabao and Australia Prime Minister Julia Gillard signed a number of agreements in Beijing on bilateral cooperation, including a financing framework agreement between China Development Bank Co., Ltd and Australia-based Carrara Mines Co., Ltd valued at $600 million.
The deal involves a cash for resources loan. The Carrara iron ore mine is run in a partnership with Australia's Gindalbie Metals Ltd and Anshan Iron and Steel Group. Gindalbie and Ansteel have an off-take agreement for Carrara iron ore, according to which Ansteel receives 100 percent of output for its new 6.5 million mt per year Bayuquan steel mill. Ansteel is exploring opportunities to expand its steel production at Bayuquan above 6.5 million mt per year in line with additional iron ore from Carrara. The $600 million loan would help finance this.