November 22, 2008

International Mineral to pay USD 1.5 billion for Jiuquan Venture

Bloomberg reported that International Mineral Resources controlled by billionaires Mr Patokh Chodiev, Mr Alijan Ibragimov and Mr Alexander Machkevitch will pay USD 1.5 billion to form a venture with China's Jiuquan Iron & Steel Group.

Jiuquan's listed unit Gansu Jiu Steel Group Hongxing Iron & Steel Ltd in a statement to the Shanghai stock exchange said that Jiuquan will inject its steel and mining assets into the venture for a 51% stake. International Mineral, a Netherlands registered metal assets company will hold the rest of the venture.

The statement also said that Jiuquan will transfer assets worth CNY 30 billion including CNY 19.2 billion of debt and holdings in Hongxing into the venture.

Mr Zheng Dong a Beijing based analyst with Guosen Securities Co said that “Buying existing facilities will give International Mineral easier access to the huge Chinese market and help it sell its mining resources. The venture would also help Jiuquan to reach the central Asian market and resources in Kazakhstan and South Africa.''