Hebei Steel buys stake in Canadian firm
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E-mail Shanghai Daily, April 16, 2012
Hebei Iron and Steel Group has agreed to invest C$194 million (US$195 million) in Canada's Alderon Iron Ore Corp as it seeks to cut production costs by securing raw material supplies.
The Chinese company will buy 25.8 million Alderon shares - a stake of about 19.9 percent - for C$88.3 million, or C$3.42 apiece, Hebei Steel said yesterday.
That is a 0.6 percent discount to the last traded price of Toronto-listed Alderon.
Hebei Steel will pay another C$105.7 million for a 25 percent interest in the Canadian miner's principal asset, the Kami project - a site near Labrador City and Wabush in Newfoundland and Labrador province.
And this deal will also give Hebei Steel the right to buy 60 percent of the annual production from Kami after the mine starts operation in 2015.
The accord was signed yesterday in Shijiazhuang, capital of north China's Hebei Province.
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