BEIJING (Reuters) - Hebei Iron & Steel Group, China’s largest steel producer, has been given the go-ahead to invest in Canadian iron ore developer Alderon Iron Ore Corp, the official Xinhua News agency quoted local authorities as saying on Sunday.
Hebei Steel said in April that it would invest about C$194 million ($195 million) for a near 20-percent stake in Alderon and a 25-percent interest in Alderon’s principal asset known as the Kami project, located in Canada’s Labrador Trough.
The deal would also give Hebei the right to buy 60 percent of annual iron ore produced from the Kami project.
The investment has gained approval from the country’s top economic planning body, the National Development and Reform Commission (NDRC), Xinhua said, quoting a statement released by the NDRC’s branch in Hebei province.
The Kami project has a proven reserve of about 1 billion metric tons, with an expected annual output of 8 million metric tons after it goes into production in 2015, Xinhua said.
The deal is part of efforts by Chinese steel producers to gain more control over foreign iron ore supplies, dominated by a handful of global miners.
China’s steel mills have been urged to source at least half of their iron ore imports from Chinese-owned or invested projects by 2015, according to a government plan issued last year.
Reporting By Xiaoyi Shao and David Stanway; Editing by Ron Popeski