MELBOURNE (Reuters) - Japan’s Mitsubishi Corp (8058.T) cleared the last hurdle on Monday to take control of iron ore, port and rail projects in Western Australia which are slated to cost $10 billion and which it hopes to fund with Chinese partners.
Shareholders in Murchison Metals MMX.AX approved the sale of the company’s 50 percent stakes in the Jack Hills iron ore mine and its affiliated Oakajee port and rail project to its partner, Mitsubishi, for A$325 million ($347 million), a spokesman said.
The deal is due to close on February 20.
The long delayed port project is key to opening up a new iron ore province in Western Australia outside the control of dominant iron ore producers, Rio Tinto (RIO.AX)(RIO.L) and BHP Billiton (BHP.AX)(BLT.L).
The A$5.9 billion Oakajee port and rail project and the $3.7 billion Jack Hills iron ore expansion project have been held back due to cost blowouts which Murchison could not afford and the failure to line up companies to use the infrastructure.
Murchison’s biggest shareholder, South Korean steel maker POSCO (005490.KS), last year said it was considering buying stakes in Jack Hills and the Oakajee project.
Other potential partners in the infrastructure are Sinosteel SINOS.UL, which is developing the Midwest iron ore project, and Angang Steel Co (000898.SZ), which is backing Gindalbie Metals’ (GBG.AX) Karara iron ore project.
Last week, Western Australian Premier Colin Barnett said Mitsubishi was due to meet with potential Chinese partners in Beijing later this month to discuss participating in the two projects.
“There is a major meeting in Beijing, in the next few weeks, involving Australian companies, the Chinese state owned enterprises, Mitsubishi, some financial institutions from China, and that will be the critical meeting and hopefully bringing China formally into the project and moving forward,” Barnett told a local radio station in Western Australia.
Reporting by Sonali Paul; editing by Miral Fahmy