WISCO approved to exploit iron ore with CXM, becoming second-largest shareholder

Nov. 5 MetalBiz--WISCO Group announced on November 5 that Australia Foreign Investment Review Board formally approved that WISCO cooperates with South Australia CXM on iron ore project. This project obtained the approval of National Development and Reform Committee on September 3 this year. But WISCO's another project in South Australia suffered setbacks.

CXM is of resource exploiting company, owning several iron mines' right in Australia Eyre Peninsula's east coastal. CXM was listed on July 19 2006, publishing 269,330,665 common shares.

In this co-operation, CXM increasingly sold its 15% shares to WISCO at the price of per-share 0.25 euro with total amount of 10.1mln euro. After that, WISCO will become the second-largest shareholder of CXM, naming a director in CXM. Meanwhile, WISCO paid 216mln euro to obtain 60% right of CXM's five leasing places, with total resource of 2bln tons. WISCO will pay 108mln euro in two years according to 1bln tons of resource per year, and rest will be paid in installment in accordance with increasing exploit volume.

After deal, WISCO and CXM establish a joint venture at the ratio of 60:40, taking charge of exploiting, constructing and operating. The first task of the joint venture is exploiting iron mine area. WISCO also reached an agreement with CXM launching the research and construction of SheepHill port through founding 50:50 joint venture.

But WISCO's another project in South Australia met barrier, Deng Qilin, general manager of WISCO told to Sina Finance that WISCO is negotiating with Australia government on investing 45mln euro to WPG's HawkNest iron ore project. Previously Australia Defense Department did not support that WISCO exploits HawksNest project saying this iron ore project being military forbidden area.

Deng Qilin said that WISCO has sent a work group communicates with the related departments, and the local government expressed the support. WISCO will strive to obtain understanding from Australia military and deal with it cautiously, till now, there is no plan to amend the trade schedule. "HawkNest in middle South Australia we will exploit is 00 kilometers far from 2 from military base, and three projects in the same area are been developed, the opposition is short for the adequate ground; if the worst result emerges, WISCO can only consult with WPG, considering other proposal." Deng Qilin stated.