China steelmaker Sinosteel increases Australian iron ore stake after merging with Baowu Steel
- Sinosteel’s purchase of half the future output of new Fenix Resources mine comes amid controversy over China halting imports of Australian coal
- New commitment to Fenix mine follows troubles at Sinosteel’s other Australian iron ore mines that sapped its financial resources in recent years
Chinese steel producer Sinosteel is doubling down on the Australian iron ore market with a deal to buy half of Australian-listed explorer Fenix Resources’ production just days after being taken under the wing of mega Chinese steelmaker China Baowu Steel Group.
Fenix agreed on Wednesday to sell 50 per cent of the production at its new Iron Ridge mine in Western Australia to the Chinese group. The other half will go to Hancock Prospecting’s Atlas Iron, which is owned by Australia’s richest woman, Gina Rinehart.
Fenix’s Iron Ridge, which was approved for development in September, is expected to produce about 1.25 million tonnes of iron ore a year. Production at the mine is scheduled to start later this year, with the first shipment scheduled for early 2021.
While there was speculation that the suspension was the latest retaliation in a series of trade moves against Canberra for its support of an international investigation into the origins of the coronavirus, Australian officials have so far played down the issue and sought clarification from Beijing.
