Jindal Steel to invest in Apollo’s iron ore spin-off

India’s Jindal Steel & Power will invest A$10 million ($10.4 million) into Apollo Minerals’ iron ore projects in Australia and Gabon, its latest move in securing raw materials assets overseas.

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Apollo’s wholly owned subsidiaries that hold the iron ore tenements will be transferred into a special purpose vehicle, NewCo, as part of a demerger from the exploration company’s non-ferrous mineral rights, it said on Tuesday March 19.

The demerger will include an in-specie distribution of NewCo shares to Apollo shareholders, who will hold approximately 49% of the NewCo shares.

NewCo will undertake an initial public offering (IPO) and apply to list on the Australian Securities Exchange, becoming an iron ore-focused exploration and development company. The A$10 million investment by Jindal Steel will be part of the IPO.

Apollo will remain focused on its base and precious metals portfolios.

“We believe we now have the key ingredients required to take Apollo’s iron ore projects from exploration to production in the shortest possible time,” Apollo’s non-executive chairman Tony Ho said in a statement.

NewCo’s iron ore projects include Commonwealth Hill in South Australia, Mt Oscar in Western Australia and Kango North at Gabon.

Jindal Steel bought at 9.25% stake in Apollo in May last year and agreed to increase its stake to 11.7% last month.

The Indian steelmaker is also trying to take over Gujarat NRE Coking Coal through an unconditional on-market bid.