More than 12 months after negotiation of the documentation began, Chongqing Chonggang Minerals Development Investment Limited (CCMD) has signed a Heads of Terms with SINOM Investments Limited (SINOM) and Asia Iron Holdings Limited (Asia Iron), a wholly owned subsidiary of SINOM, to acquire 60 per cent of Asia Iron under a $280 million placement.
The transaction was completed on 17 September 2010.
CCMD, SINOM and Asia Iron have also agreed on certain financing arrangements in relation to the transaction and future capital expenditures.
Asia Iron is a Hong Kong incorporated company whose subsidiaries hold mining assets in Australia, including iron ore assets located at Extension Hill (Mount Gibson Range), Koolanooka South and Wolla Wolla in the Mid West of Western Australia. Asia Iron also owns coal resources in Western Australia.
The flagship Extension Hill Magnetite Project is currently the most advanced of Asia Iron's projects, which CCMD and SINOM will jointly along with other projects of Asia Iron. The development of Stage 1 of the Extension Hill project is expected to cost approximately $US2 billion ($2.06 billion).
Completion of the transaction is a major milestone in the history of CISG and CFTEC, being the first investment in Australia from the Chongqing province; the world's fastest growing region with a population of 32 million.
Norton Rose's Perth, Hong Kong, Shanghai and Beijing offices coordinated to assist CCMD throughout the transaction. Those acting on the transaction were James Stewart, Roger Hawkins, Nicholas Wilson, Andrew Ricciardi, Chris Reden, Jon Perry, Michael Turnbull, Christina McGlip and Hong Sun.
DLA Piper Hong Kong, with assistance from DLA Phillip Fox, also acted on the deal.
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