Article by Jarrod Lucas courtesy of ABC News.
Mining magnate Gina Rinehart has struck a deal to buy into an iron ore project in WA’s northern Goldfields, further expanding her iron ore empire which includes the Roy Hill mine in the Pilbara.
A subsidiary of Ms Rinehart’s Hancock Prospecting has struck a deal to form new joint venture agreement with the owners of the Mt Bevan project, 100 kilometres west of Leonora.
Hancock Magnetite Holdings can earn a 30 per cent interest in the Mt Bevan project by investing $9 million.
It can increase its stake to 51 per cent by funding a pre-feasibility study.
Hancock is chaired by Ms Rinehart, who ranks as Australia’s richest woman with Forbes estimating her fortune at $22.6 billion.
Deal ‘first major step’
Perth-based Legacy Iron Ore – controlled by India’s biggest iron ore producer NMDC which owns 92.3 per cent of the company – currently holds a 60 per cent stake in the Mt Bevan project alongside ASX-listed Hawthorn Resources (40 per cent).
If Hancock completes a pre-feasibility study and earns a 51 per cent stake, both companies would see their interests diluted down to 29.4 per cent and 19.6 per cent respectively.
“The Mt Bevan project is an excellent opportunity for Hancock to further grow its portfolio in the iron ore business with higher-grade, lower-impurity iron ore products,” chief executive Garry Korte said in a statement.
“We look forward to working with the joint venture partners Legacy and Hawthorn to undertake the work programs and studies necessary to support a final investment decision.”
Mt Bevan comprises an estimated resource of 1.17 billion tonnes of magnetite averaging 34.9 per cent iron.
Legacy Iron Ore chief executive Rakesh Gupta described Mt Bevan as a “world class massive magnetite ore body”.
“This is our first major step to fulfil our dreams to develop it,” Mr Gupta said in a statement.
“As you may be aware that the demand of premium high grade iron ore products magnetite has been growing due to its efficiency and ability to reduce the environmental pollution for the steel industry.
“I am highly confident that with the support of our parent company, Hancock Prospecting and Hawthorn, this project would be successfully developed and would bring a social and economic boost to the regional Yilgarn province, WA and ultimately Australia.”
Shares up on new announcement
Hawthorn Resources is partnered with a group of Chinese Investors through Feng Hua Mining Investment Holding, which collectively owns 36 per cent of its shares, while former director Chris Corrigan holds 16 per cent of the company.
Hawthorn Resources managing director Mark Kerr described it as a “transformational deal” for the company.
“Hawthorn is delighted to see Hancock join us to expedite development of our top-quality iron ore project,” Mr Kerr said in a statement.
“All steel mills favour high-grade ore as they seek to reduce emissions going forward.”
Shares in Legacy Iron Ore were up 21 per cent in early trade at 1.7 cents on news of the Hancock deal, while Hawthorn Resources shot up 30 per cent at 7.2 cents.
