Australia's Aquila Resources said Thursday its major shareholder China's Baosteel has increased its ownership to 20% after purchasing an additional 4.6% stake of the Perth-based miner.
Baosteel acquired 15% of Aquila in 2009.
Aquila said Baosteel's recent share purchase shows the Chinese steel giant's continued support for the development of Aquila's West Pilbara iron ore project in Western Australia, which is currently in development and expected to produce 30 million mt/year.
Aquila is developing the West Pilbara iron ore project as a 50:50 joint venture with American Metals & Coal International or AMCI. It will require a 282-km railway and port capacity at the undeveloped Anketell Point, located west of Port Hedland.
However, Aquila and AMCI have been in dispute over the past year about the budget for the estimated A$7.4 billion ($6.5 billion) project. But at the company's recent annual general meeting, Chairman Tony Poli said Aquila continues to engage with AMCI regarding advancement of the project.
"To date, we have not been able to agree with AMCI how this should occur, and until an agreement is reached, we believe that AMCI will likely require the project to remain on minimum expenditure, in line with its position of the 2014 financial year budget," he said on November 29.
A company official also confirmed Thursday that negotiations are continuing with AMCI and no start dates for construction have been set for the West Pilbara iron ore project.
"With over $500 million in cash and liquids, a high-quality portfolio of assets and the Eagle Downs hard coking coal project under construction, the company remains well positioned to capitalize on China's ongoing demand for steel making raw materials," Aquila said in the statement Thursday.
Eagle Downs is due to start production in 2017 at a rate of 4 million to 5 million mt/year. Eagle Downs is a 50:50 JV project with Brazil's Vale and is located south of Moranbah in the Bowen Basin, close to BHP Billiton-Mitsubishi Alliance's Peak Downs mine.
