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Chongqing Steel's latest mine purchase brings self-sufficiency

Chongqing Steel's latest mine purchase brings self-sufficiency

Hong Kong: Chinese steelmaker Chongqing Steel has received approval from both the Chinese National Development and Reform Commission and also from the Australian authorities for its acquisition of an Australian mine owned by Hong Kong-registered Asia Steel Holdings Limited .
According to the deal, Chongqing Steel will invest US$258 million (RMB 1.75 billion) in Asia Steel, and Chongqing Steel will receive 60 percent of Asia Steel's additional shares.
The acquisition will supply Chongqing Steel's new Changshou mill. With the Australian mine and five mines in three provinces in China, the management said Chongqing Steel will be self-sufficient in iron ore and will not need to worry about the overseas iron ore giants.
The strategy from China these days is to buy out as much of its needed raw material supply chain as possible. Speaking at the Shanghai International Shipping Forum last week, Lejiang Xu, the chairman of China's largest steel mill, Baosteel, explained: 'China will more frequently look for new overseas mineral resources, invest in mining and participate in the international strategic layout of the industrial chain, such as the acquisition of mines and building of new steel mill. In the medium to long term, the shadow of resource monopoly that has shrouded the Chinese steel industry will be broken.' [02/04/10]

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