Mineral Resources buys Australia-based Red Hill Iron’s 40pc interest in the Red Hill Iron ore joint venture (RHIOJV) for AUD$400mn ($296mn) to be paid in two installments, with the second AUD$200mn due when the mineral is extracted. Red Hill would also receive royalty payments of 0.75pc for revenue generated from iron ore extracted and sold from the venture. The acquisition is expected to be finalized in September 2021.
The other 60pc investment in RHIOJV is kept by API Management. The venture’s resources are approximately 820mn mt with a grading of Fe 56.44pc.
Red Hill proceeded with the divestiture after an impasse with Aquila Resources and POSCO to develop a shared agreement for developing the project. Mineral Resources is potentially better equipped to move forward with the mining operation from funding to execution as it seeks to expand its export business around the Ashburton Hub.
API is operated by Aquila Steel and American Metals & Coal (AMC) with Aquila having a large Baosteel investment while AMC has funding that includes POSCO.