Citic Pacific is to invest about US$1.5 billion in two magnetite ore mines in Western Australia, marking its first foray overseas.
In a deal closed late last night, the Beijing-backed conglomerate will pay US$415 million for two mining firms - Sino Iron and Balmoral Iron - from Australia-based Mineralogy.
The two firm's mines in the Pilbara region of Australia can provide more than six billion tonnes of magnetite ore, one of the raw materials used for special steel, over 25 years beginning 2009, Citic Pacific said.
The deal, backed by the central government, will involve selling a 50 per cent stake of the mining rights to a state-appointed mainland steel company within the next three months.
The disposal will be made at cost with no preferential terms given.
The mines will be fully managed by Citic Pacific after the sale.
About US$2.5 billion will be invested in the mines by 2010, of which half will be funded by Citic Pacific and the rest by its future mainland partner.
