August 10 -- Pangang Group Steel Vanadium & Titanium (PSV) (000629) announced it will inject AU$370 million into the Karara iron ore mine through its subsidiaries, reports yicai.com, citing a company filing. PSV plans to inject capital into Karara through Ansteel Group Hong Kong Holdings and Ansteel Group Australian Corporation.

Ansteel Group Australian Corporation and Gindalbie Metals, an Australian company, held 50-percent stakes in the Karara project respectively. In light of the mine’s expansion, Ansteel Group Australian Corporation and Gindalbie Metals plan to inject a total of AU$600 million into Karara Iron Ore. Of that total, Ansteel Group Australian Corporation will spend AU$300 million.

In addition, Gindalbie Metals plans to raise 209 million by a placement to invest in the construction of the Karara iron ore program. Ansteel Group Hong Kong Holdings held 33.58 million shares of Gindalbie Metals, and it had to spend about AU$75 million to buy shares in the placement.

PSV stressed that the Karara mine is in a trial operation phase at the moment. Hematite output is expected to reach 400,000 tons by next January and two million tons by the end of 2012.

Rising raw material and labor costs have lifted Karara’s overall construction costs to AU$2.57 billion, markedly higher than prior cost estimates.

The per-ton operating cost of Karara iron ore is AU$65-68, and the mine is expected to be an important source of profits for its major shareholders.

After an upcoming restructuring, PSV will hold a 100% stake in Ansteel Group Hong Kong Holdings and Ansteel Group Australian Corporation.
 

Source:CapitalVue