Australia’s third largest iron ore supplier and Hualing to carry out comprehensive strategic cooperation

Hunan Hualing Iron and Steel Group Co., Ltd., which has just become the second largest shareholder of Australia’s third largest iron ore supplier, Fortescue Metals Group Ltd (“FMG”), signed a contract with FMG in Changsha on the 8th. Comprehensive strategic cooperation agreement, the two sides will carry out further cooperation in the fields of iron ore development and sales, non-ferrous metals, engineering construction, equipment procurement and shipping.

In February this year, Valin subscribed FMG 260 million shares to issue new shares, and after purchasing 275 million shares of FMG shares from the US Harbinger Fund, it held a total of 535 million shares of FMG. The equity, representing 17.34% of the total issued share capital, became the second largest shareholder of FMG. Li Xiaowei, chairman of Valin Group, also became a director of FMG. Subsequently, the transaction was approved by the Australian and Chinese government regulatory authorities and completed on April 29.

The Hualing Group, headquartered in Changsha, is one of the few inland steel companies in China that does not have iron ore resources. Iron ore is all dependent on outsourcing. After the equity subscription, Valin signed a business cooperation agreement with FMG. FMG will supply 10 million tons of iron ore to Valin annually at the long-term agreement price of Australia’s iron ore to China. The comprehensive strategic cooperation agreement signed on the 8th is a further expansion of the agreement.

According to Li Xiaowei, the agreement includes joint exploration of ore and non-ferrous metals in Australia, research and development of low-grade iron ore and processing of raw materials with research institutions such as Central South University, and plans to establish a joint venture shipping company to discuss shipping cooperation. Possibility, etc.

Li Xiaowei said that FMG currently has an annual production capacity of 55 million tons of iron ore, and the future plan is to expand production to 95 million tons. In the plan, Valin will coordinate with China’s construction units and financial institutions to actively support FMG to build supporting facilities such as railways and terminals, and expand FMG’s iron ore sales in China. FMG also agreed to prioritize the procurement of construction machinery, train locomotives and other related equipment in Hunan.

FMG CEO Andrew Frost said that the close cooperation between the two parties will make FMG more Chinese, and may promote FMG to list on the Shanghai Stock Exchange, becoming the first foreign ore listed in China. enterprise.

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