MELBOURNE, June 20 Australian iron ore producer
Grange Resources is looking to sell at least a 30
percent stake in its $2.9 billion Southdown magnetite project in
Western Australia to ease the funding burden, it said on
Grange appointed Deutsche Bank to advise on the
selldown of its 70 percent stake in the project, which is
designed to produce 10 million tonnes a year of magnetite
concentrate for more than 30 years.
"The introduction of a third joint venture partner to the
project is the best way to increase the project's certainty and
viability, and reduce the risk profile that Grange currently has
with this project," Grange Managing Director Russell Clark said
in a statement.
There was interest in Southdown from around the world,
particularly China and other Asian countries, he said. The
project is already 30 percent owned by a Japanese consortium
made up of trading house Sojitz Corp and Kobe Steel
Kobe Steel, Japan's no.4 steel maker, is reported to have
paid between A$50 million and A$80 million when it bought its 10
percent indirect interest, which would value all of the equity
in the project at A$500 million to A$800 million, Clark said.
Southdown is key to Grange's growth as it is expected to
produce four times as much magnetite as its existing Savage
Grange shares rose 2 percent to A$0.51 on Thursday outpacing
a 0.2 percent rise in the broader market and valuing the company
at A$589 million.
($1 = 0.9912 Australian dollars)
(Reporting by Sonali Paul; Editing by Ed Davies)