Centrex Metals will use the Aus$102 million received as part of its joint venture with Wuhan Iron & Steel (Group) Co (WISCO) to advance two iron ore projects on South Australia’s Eyre Peninsula.
WISCO has acquired a 60% interest in the iron ore rights over five of Centrex’s exploration licences on South Australia’s Eyre Peninsula that make up the joint venture. Centrex holds the remaining 40% of the joint venture.
In order to maintain its 60% interest, WISCO must make further unconditional payments in 12 months with another Aus$26 million to be paid directly to Centrex and an additional Aus$25 million into exploration for the joint venture.
WISCO and Centrex have established a joint venture management company, Eyre Iron Pty Ltd, to begin exploration and development studies on the projects immediately.
The joint venture aims to establish two magnetite iron ore operations within 4-5 years on the southern Eyre Peninsula, each annually producing 5 million tonnes.
If the joint venture moves to construction on the projects, WISCO has agreed to assist Centrex with arranging financing.
The companies are also committed to a separate 50/50 incorporated joint venture to develop a deep water Cape-vessel capable port on the eastern Eyre Peninsula.
Centrex’s chairman David Klingberg says, “The WISCO joint venture is a company making deal for Centrex and is significant news for the economy of the Eyre Peninsula and South Australia.”
WISCO is ranked third in its sector in China, with current annual capacity of 30 million tonnes of steel making and rolling operations. Its operations are predominately in Wuhan in the Hubei province of central China.