Men Of Steel: Dutch, British Iron-steel Alliance Promulgated With Chinese Company

Published by MAC on 2007-08-15
Source: Interfax China Metals

Men of Steel: Dutch, British Iron-Steel Alliance Promulgated with Chinese Company

Jiuquan Steel may be restructured through a JV deal with the Kazakhstan-based Europe-Asia Industry Association (EAIA), which will effectively restructure the Chinese company.

According to the agreement, Jiuquan Steel will acquire a 51 percent stake in the joint venture by injecting all its iron and steel assets, land and mines, as well as its stake in Jiu Steel Hongxing and Jiuquan Steel Yuzhong Iron and Steel Co. Ltd. The two EAIA subsidiary companies, Netherlands-based International Mineral Resources BV, and UK-based Eurasian Natural Resources Corp., will invest cash in return for the remaining 49 percent stake in the joint venture.

International Mineral Resources has said it will provide Jiuquan Steel and the joint venture with a stable supply of iron ore concentrate and pellet at fair market prices and, if possible, grant the joint venture access to development programs for iron mines in Kazakhstan, as well as other overseas mineral resources.
But, under the current framework agreement, EAIA will not invest any mining assets into the joint venture, relying instead on cash financing. However, the agreement is currently awaiting National Development and Reform Commission approval.

International Resources is one of the world's largest private mining and metals investment groups, specialising in the production and sale of nickel, chrome, ferrochrome and copper resources. The company's controlled subsidiaries are capable of producing a combined total of 1.1 million tons of ferrochrome and 30,000 tons of nickel per annum. Eurasian Resources owns 3.41 billion tons of proven iron ore reserves and has an annual production capacity of 15 million tons of iron ore concentrate and pellet, 1.5 million tons of alumina, 1.5 million tons of ferroalloy and 3.3 million tons of chrome ore.

In addition to the EAIA agreement, Shanghai Baoshan Iron and Steel Group (Baosteel Group), China's largest steelmaker, has also showed an interest taking part in Jiuquan Steel's restructuring.

[source: Interfax China Metals, 24 August 2007]