Australia's Sheffield Resources gets nod for $98 mn funding by Chinese firm

Australia's Sheffield Resources said it had received regulatory approval for an $98 million investment by a Chinese firm in the miner's flagship mineral sands project at home

(Reuters) - Australia's Sheffield Resources said it had received regulatory approval for an A$130 million ($98 million) investment by a Chinese firm in the miner's flagship mineral sands project at home, driving its shares up about 50%.

The go-ahead from Australia's Foreign Investment Review Board (FIRB) comes amid elevated trade tensions and reports of Chinese import curbs on Australian coal. Beijing has imposed a series of trade reprisals after Canberra called for a global inquiry into the source of the coronavirus.

In a statement to the exchange on Tuesday, Sheffield said the FIRB did not object to the deal with YGH Australia Investment or Yansteel, which is an arm of private Chinese firm Tangshan Yanshan Iron & Steel Co.

 

Yansteel's investment into Sheffield's flagship Thunderbird mineral sands project in Western Australia will give it a 50% stake in the project while providing Sheffield with the funds to begin construction of the first stage of the project.

The companies have also signed a supply deal where Yansteel will buy 100% of the ilmenite - a titanium-iron oxide mineral - generated under the first stage of the project and process it at a plant it is building.

Sheffield said both parties were targeting finalisation of the formal joint venture agreements over the coming weeks, with a final investment decision on the project expected in 2021.

Shares of the Australian miner jumped as much as 50% to A$0.480, highest since Sept. 5, 2019, before trading up 25% later in the session versus a 0.2% decline on the ASX200 benchmark index.

($1 = 1.3316 Australian dollars)

 

(Reporting by Rashmi Ashok in Bengaluru; Editing by Himani Sarkar)