BEIJING, Feb 28: China’s privately-owned Hanlong Group is talking to four state-owned steel mills to find a partner for the $4.7-billion Mbalam iron ore project in Africa, the chief executive of project owner and takeover target, Sundance Resources, said on Thursday.
Hanlong has been ordered to team up with a large Chinese company for the Mbalam project in order to secure final approval from China’s top planner, the National Development and Reform Commission (NDRC), for the A$1.38-billion ($1.41 billion) Sundance takeover.
The takeover has been held up for a year due to delays in securing approvals from the Chinese government, which is keen to ensure that Mbalam is properly funded to help break the grip of mega miners Vale, Rio Tinto and BHP Billiton on iron ore supplies.
Sundance Chief Executive Giulio Casello declined to say which steel mills Hanlong was talking to.
He added that Sundance was continuing talks with other potential partners for the Mbalam project on the border of Cameroon and the Republic of Congo, in case Hanlong’s bid, first launched in October 2011, fails to go ahead.
‘We are in discussion with other partners,’ Casello told reporters at an iron ore conference in Beijing, adding that those partners were ‘Western’.
‘We will continue the discussion until Hanlong gets final approval,’ he said.
Sundance wants to see credit approved term sheets from China Development Bank funding Hanlong’s bid by March 26.
In a sign that it remains committed to the offer, Hanlong made a A$5-million payment into a convertible note facility on Thursday, one of three payments it agreed to make while it tries to line up a big Chinese partner for the Mbalam project.
Sundance’s shares rose 3.5 percent to A$0.30 after the announcement but remained one-third below Hanlong’s offer price of 45 cents a share, reflecting uncertainty over whether the deal will go ahead. ($1=0.9797 Australian dollars)
(AGENCIES)
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