CHINA could be set to take full ownership of a Western Australian iron ore mine after its Australian joint venture partner flagged it was reviewing the value of its interest.
Gindalbie Metals last night suspended trading in its shares as it awaits the outcome of a review of the value of its shareholding in the Karara iron ore project, which is a joint venture with China’s Ansteel.
“In light of recent developments including, lower than forecast iron ore price, higher than anticipated Australian dollar exchange rate and current capacity restrictions at Karara, the company has commissioned an independent review of the value of its shareholding in Karara,” Gindalbie said in its quarterly report.
“The company will provide an update in a further announcement to the market once the results of this review have been considered by directors.”
The Chinese company is already on track to earn more than a 60 per cent interest in the project, as Gindalbie has had to rely on the Chinese steel giant to offer further financial support to meet its share of debt repayments on the joint venture project.
Gindalbie also outlined in its report that given the ongoing work to assess and improve the production capacity and performance of the Karara operation, its board was not in a position to provide accurate production guidance or forecast when the project will achieve positive cash flow.
Source: The Austrlian
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