Grange Resources to sell 30% stake in Southdown magnetite project
Grange Resources has appointed Deutsche Bank as corporate advisor to sell at least a 30% stake of its Southdown magnetite project in southwest Australia in a bid to secure funding.
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“We are looking to sell at least a 30% stake of the project, providing a terrific opportunity for a suitable strategic investor requiring long-term offtake of a premium-quality pellet feed,” Russell Clark, md of the Australian Securities Exchange-listed company, said in an announcement on Wednesday June 20.
More than $150 million have been spent over the past five years on the development of the Southdown project, which has an expected lifespan of more than 30 years, he said.
Southdown has 1.2 billion tonne of resources and close to 400 million tonnes of reserves, with a designed production capacity of 10 million tpy of premium magnetite concentrate at 69.4% Fe content.
Southdown is a joint venture between Grange Resources and Japan’s Sojitz Resources & Technology (SRT). Grange Resources holds a 70% stake while SRT holds the remaining 30%.
SRT is jointly owned by Sojitz Corporation and Kobe Steel, the fourth-largest Japanese steelmaker.
Kobe Steel indirectly holds a 9.9% stake in Southdown and will buy 1.5 million tpy of pellet feed from the project.
Grange Resources previously engaged Standard Chartered as debt advisor to the joint venture.