Baosteel Group, which has been more cautious about overseas acquisitions, has finally achieved a new goal: the mineral resources sector of stainless steel raw materials.
The Toronto-based mining company Noront Resources issued a statement yesterday saying that the company has reached an agreement with Baosteel Group’s Baosteel Resources, which will acquire a 9.9% stake in Noront for 17.4 million Canadian dollars (about 120 million yuan).
According to the agreement, Baosteel Resources will spend 19.4 million Canadian dollars to purchase 9.9% of shares from Noront Resources, equivalent to 0.86 Canadian dollars per share, and Baosteel can also choose to invest 11.7 million Canadian dollars (approximately 79.87 million yuan) to exercise certain warrants. , increase the shareholding to 14.5%.
It is understood that Noront Resources is a nickel and chromite ore prospecting company in Canada and that nickel, chromium, copper, platinum and palladium have been found in the mines it explores. Among them, nickel and ferrochromium are the raw materials for stainless steel making.
According to the regulations, Baosteel also has the right to appoint a director to Noront Resources and has the right to increase the stake in Noront Resources to 17.4% in the coming year.
However, the transaction also requires the approval of the Baosteel Board of Directors and the regulatory authorities of both countries. Noront Resources expects the transaction to be realized in June 2011.
Since the financial crisis, the domestic steel companies have been surging overseas to invest in ore mining, and Baosteel has been relatively cautious in overseas investment in minerals. Prior to this, Baosteel only reached an investment agreement with Aquila Resources Co., Ltd., an Australian listed company, and acquired Aquila's 15% stake in cash for 286 million Australian dollars (equivalent to 1.794 billion yuan), becoming its second largest shareholder.
It is worth noting that unlike other companies’ overseas acquisitions, Baosteel’s overseas resource investment does not require absolute control. For this reason, Xu Lejiang, Chairman of Baosteel Group, expressed at the recent China-Australia Economic and Trade Cooperation Forum that he did not agree Chinese steel companies control 100% of upstream resources.
Xu Lejiang pointed out that 100% of the iron and steel enterprises must control the upstream resources and may not meet the requirements of the industry chain. The development of resources is not an iron and steel company's advantage, but he also agrees that steel companies can make appropriate investment in the upstream sector, and mining companies can also moderately participate in shares. steel industry.
Xu Lejiang also believes that the risks accumulated over the years in the nation's steel industry chain are about to be released. In the future, the reversal of supply and demand may lead to a sharp fall in iron ore prices.
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