JOHANNESBURG (miningweekly.com) – ASX-listed mineral developer Aquila Resources on Friday reported that it had executed a memorandum of strategic cooperation and a share subscription agreement with China’s Baosteel.

The placement would also provide Aquila with significantly greater capacity to accelerate the development of its key, high quality raw materials asset portfolio.

The share subscription agreement provided for a placement of up to 43,9-million shares in the company, at A$6,50 a share, for a total capital proceed of A$285,6-million. The placement, when completed, would result in Baosteel owning up to 15% of the expanded issued shares capital of Aquila.

Aquila and Baosteel have also entered into a memorandum of strategic cooperation, which provides a foundation for long-term strategic cooperation between the two companies, in relation to key projects.

Baosteel would work with Aquila to assist in sourcing low-cost financing from Chinese institutions for a number of the company’s projects, including the West Pilbara iron-ore project. “

Subject to government and project participant approvals, with the necessary funding being made available, Aquila’s portfolio of projects could be developed in the timeframes currently considered, launching the company as a producer of steel raw materials.

For Baosteel, Aquila’s portfolio of projects has the potential to deliver significant new supplies of iron-ore, coking coal and manganese. “The involvement of Baosteel now paves the way for Aquila to pursue its strategic vision of drawing together supply through its interesting the West Pilbara iron-ore project, and shipping through the planned Anketell Port.”

In addition, the two companies would also work together towards establishing a joint sales arrangement to assist in the distribution of Aquila’s, and potentially Baosteel’s share of production, from these key projects, throughout China.

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