It is reported that Australian iron ore producer Grange Resources is looking to sell at least a 30% stake in its USD 2.9 billion Southdown magnetite project in Western Australia to ease the funding burden.

Grange appointed Deutsche Bank to advise on the selldown of its 70% stake in the project which is designed to produce 10 million tonnes a year of magnetite concentrate for more than 30 years.

Mr Russell Clark Grange Managing Director said in a statement that "The introduction of a third joint venture partner to the project is the best way to increase the project's certainty and viability and reduce the risk profile that Grange currently has with this project."

He said that there was interest in Southdown from around the world particularly China and other Asian countries. The project is already 30% owned by a Japanese consortium made up of trading house Sojitz Corp and Kobe Steel.

Mr Clark said Kobe Steel, Japan no.4 steel maker is reported to have paid between AUD 50 million and AUD 80 million when it bought its 10% indirect interest which would value all of the equity in the project at AUD 500 million to AUD 800 million.

Southdown is key to Grange's growth as it is expected to produce four times as much magnetite as its existing Savage River operation.

Source - Reuters

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