CBI member, Mitsubishi Corporation has announced that it has entered into an agreement with China’s state-owned, SinoSteel to divest its interests in an iron ore mine and rail and port infrastructure project in Western Australia, in a deal reportedly valued at $7 billion dollars.
Mitsubishi acquired an original 50% stake in the project in 2007 for $100 million, and bought the project outright in 2012 for an additional $225 million. The project revolved around the refurbishment of the Jack Hills iron ore mine, as well as a proposed rail and port facility for the export of iron ore. Before acquiring the site, SinoSteel had been set to be a major customer of the port and rail facility for the export of iron ore to China.
Mitsubishi said in a statement that the Japanese group agreed to exit the project considering its own divestment strategy, which sees the company transition to place a higher emphasis on ‘green investments.’
Shares were reportedly transferred between Mitsubishi Corporation and SinoSteel on Friday. At that time, the Jack Hills iron ore mine project, named Crossland Resources, had capital of $375 million. Mitsubishi revealed that development had been expensive while withholding the sum, but disclosed that it was satisfied with the agreement it had drawn up with its Chinese partner.
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