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Mitsubishi sells stalled A$9.7B iron ore project to Sinosteel

Mitsubishi Corp. completed the transfer of shares in its long-delayed A$9.7 billion Jack Hills iron ore mine, expansion, and planned rail and port facility in Western Australia to Sinosteel Corp. on Oct. 18.

The price was not disclosed due to a confidentiality clause in the deal's terms.

Mitsubishi divested all of its interest in project holder Crosslands Resources Ltd. to Sinosteel Ocean Capital Pty. Ltd. for an undisclosed sum and sold related assets to another Sinosteel-related company, Mitsubishi said in an Oct. 1 filing.

Mitsubishi said the divestment is part of its strategy of optimizing its asset portfolio. In July 2018, The Australian Financial Review reported that Mitsubishi had agreed to sell the project to an unnamed buyer.

The company had paid A$150 million for an initial 50% stake in Crosslands in 2007 and a further A$325 million for the remaining interest in 2012, according to an Oct. 21 Reuters report.

The company had advanced Jack Hills' feasibility study and discussions for a potential joint partner before the mine was put on care and maintenance due to low iron ore prices.

Sinosteel acquired Crosslands for nil consideration, while two Sinosteel units paid A$3 each for their respective 50% stakes in Oakajee Port and Rail Pty. Ltd., which owns the studies and intellectual property for the nearby Oakajee railway network and deepwater port, The Australian Financial Review reported Oct. 21, citing Australian Securities and Investments Commission documents. Oakajee once proposed port tariffs that Sinosteel had considered to be economically unviable for its A$2 billion Weld Range iron ore project, the report said.