Australia's Centrex readies port for China ore

SYDNEY Oct 6 (Reuters) - Australia's Centrex Minerals (CXM.AX) has won approval to refurbish a disused wharf in Australia to ship 3 million tonnes of iron ore to China over the next five years, the company and government officials said on Tuesday.

The approval, which took three years and was opposed by South Australia state's fishing and seafood industry, sent Centrex shares 18 percent higher to A$0.66, outpacing gains in the wider market .AXJO.

The ore is to be mined from Centrex's Wilgerup deposit and shipped to China's 10th largest steelmaker, Baotou Iron & Steel Group, in annual shipments of 600,000 tonnes, a Centrex spokesman said. It expects to make its first shipment in late 2010.

Baotou, which holds 8.13 percent of Centrex's stock, agreed to the sales in August, pending clearance to refurbish the wharf. Opponents said using the port in the town of Lincoln for iron ore would damage the image of the state's fishing and seafood sector.

"Mining and the aquaculture industry are both important to the economic future of South Australia and can co-exist in Port Lincoln through the safeguards imposed by the approval conditions," the state's minister for urban development and planning, Paul Holloway, said in a statement.

Centrex plans to crush the ore at its mine and deliver it to the port in covered trucks. The ore then would be transferred to ships in enclosed areas.

Centrex expects its mine to yield 1.6 million tonnes of ore annually, according to the spokesman. (Reporting by James Regan)