2% Posco joins Pallinghurst project
Brendan Ryan | Thu, 02 Jul 2009 11:19[miningmx.com] -- SOUTH Korean steel giant Posco, which has committed to invest up to $200m in projects as a partner with Pallinghurst Resources (Pallinghurst), has come on board for Pallinghurst’s Australian iron ore venture. Posco previously agreed on June 4 to buy an 11.4% stake costing $34.3m in Pallinghurst’s Tshipi manganese project in the Northern Cape as part of its agreement with Pallinghurst to co-invest in steel feedstock projects. Posco has now bought a 16.65% stake in ASX-listed Jupiter Mines, which controls four iron ore projects in the Central Yilgarn in the southern part of Western Australia. Pallinghurst and its joint venture partner Red Rock Resources (RRR) already owned a combined 43.6% stake in Jupiter. Bringing Posco on board bumps that up to a controlling 53% held between the three partners. Posco has also agreed to an arms-length offtake agreement through which it will buy up to 50% of Jupiter’s iron ore production. Jupiter chairperson Geoffrey Wedlock said: “Posco’s technical capability and experience are highly regarded and will be very beneficial to us as we take Jupiter to the next stage of its growth. “With both Pallinghurst and now Posco as strategic partners and major investors in Jupiter, the company has strong leadership and is in a position to capitalise on acquisition and growth opportunities,” he said. Posco is paying $7.8m for the stake which will increase Jupiter’s cash on hand to more than $14.5m. Pallinghurst’s strategy is to consolidate a number of iron ore projects in the Central Yilgarn and export the iron ore through the port of Esperance, which already handles about 8 million tonnes (mt) annually for an iron ore producer in the region. Estimates are Esperance has the capacity to handle up to15mt/year of iron ore exports. Pallinghurst CEO Arne Frandsen said: “Posco has done its research and decided this iron ore is of a superior quality and they want it. I would be disappointed if Jupiter is not exporting around 5mt annually from the Central Yilgarn within three years.” *The writer owns shares in Pallinghurst.
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