Deacons advised China’s Anshan Iron & Steel Group Corporation (Ansteel) in one of the first binding agreements between a Chinese steel maker and a listed Australian iron ore company. Partner Ian McCubbin led the Deacons team, supported by senior associate James Hains, lawyer Georgette Leader in Melbourne, and Perth partners John Chandler and Liz Allnut.
The agreement, with Gindalbie Metals, was signed during the recent visit of China’s premier, Wen Jia Bao, at a ceremony on 3 April at Parliament House in Canberra. Deputy Prime Minister Mark Vaille, the Industry Minister Ian Mcfarlane, and Ma Kai, the chairman of China’s National Development and Reform Commission attended the ceremony.
The parties have committed to a $30 million feasibility study, and contingent on that, a joint venture into the $1 billion development of Gindalbie’s Karara iron ore pellet plant project in Western Australia. Ansteel will have a 50 per cent stake in the Karara project in return for providing all the debt funding and 75 per cent of the necessary equity funding. The steel maker will also have off-take rights to buy all the haematite iron ore Gindalbie produces in a separate project to start next year.
Other Australian iron ore companies, including Midwest Corp, Mt Gibson Iron and Cape Lambert Iron, have signed preliminary project development agreements with Chinese steel makers, but none have binding contracts.