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Centrex's $271m deal with China approved

Hot Topic: China goes shopping abroad

Sarah-Jane Tasker | November 05, 2009
Article  from The Australian

THE foreign investment review board has approved another Chinese investment in Australia's resources sector, with Centrex Metals' deal with the economic powerhouse given the green light.

The South Australian iron ore hopeful said today its $271 million deal with state-owned Wuhan Iron & Steel Company - for a 60 per cent stake in a joint venture project and a 12.9 per cent stake in Centrex - was approved by FIRB.

It is now the sixth approval of Chinese investment in the mining sector in the past three weeks, with China Railway Resources Group's local subsidiary CREC Resources' $14.8m bid for 80 per cent of Perth's RMA Energy, also approved this week.

Centrex already has a Chinese firm on its register, with another state-owned steelmaker, Baotau Iron and Steel, holding an 8.13 per cent stake in the junior.

In August, Centrex signed a $40m deal with Baotau to jointly develop another group of South Australian magnetite iron ore assets in a deal still being decided by the FIRB.

Centrex chairman David Lindh said the WISCO deal meant the company would enter 2010 with a well funded iron ore growth strategy that under existing contracts and commitments is already a minerals export business worth around $500m in the next few years.