Sundance, China group deal close
Such a move would give China a stronger role in setting global iron ore prices.
China's official Xinhua News Agency reported at the weekend that Hanlong plans to complete the acquisition of Sundance Resources for 45¢ a share by March 1, after submitting paperwork to the Australian Securities and Investments Commission. The report cited officials from Hanlong, based in southwestern China's Sichuan province.
The prospect of a takeover appeared remote earlier this month following Hanlong's request to delay the bid because it could not secure funding by December 13.
Even so, Sundance directors continued to explore options to strike a deal with Hanlong.
Sundance controls the Mbalam iron ore mine, which straddles Cameroon and the Republic of Congo.
Hanlong is seeking a partnership with Chinese state-owned companies and investing $4.8 billion to develop the Mbalam project and to build a 550-kilometre railway and a shipping port, Xinhua said. Operations are expected to begin in 2014.
As the world's second-largest economy, China is eager to acquire overseas assets and resources to feed its rapid growth.
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Hanlong Group has said it is close to finalising the acquisition of Australian miner Sundance Resources. The proposed deal would give Hanlong control of Sundance’s major Mbalam iron ore project in West Africa.
Hanlong Group is a privately owned Chinese company based in Sichuan province. Sundance Resources is an Australian mining firm that controls the Mbalam iron ore mine that straddles Cameroon and the Republic of Congo.
According to the report, Hanlong plans to complete the acquisition for 45 cents a share, with a target completion date of March 1 after submitting paperwork to regulators.
Earlier the takeover appeared remote after Hanlong requested a delay because it could not secure funding by the December 13 deadline. Despite that, Sundance’s directors continued to explore options to strike a deal.
Sundance controls the Mbalam iron ore mine, which lies across the border between Cameroon and the Republic of Congo in West Africa.
Hanlong is seeking partnerships with Chinese state-owned companies and plans to invest about $4.8 billion to develop the Mbalam project, including building a 550-kilometre railway and a shipping port, with operations expected to begin in 2014.
Hanlong submitted paperwork to the Australian Securities and Investments Commission (ASIC) as part of the regulatory process to complete the proposed acquisition.
The deal would give China a stronger role in the supply side of the iron ore market, which could influence global iron ore prices. For everyday investors, that means shifts in supply control from this deal could affect commodity pricing dynamics and sectors exposed to iron ore price changes.
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