GINDALBIE Metals has expanded the relationship with its Chinese partner to provide the iron ore miner with access to capital to target new opportunities.
After a board meeting in China this week, Gindalbie and Chinese partner Ansteel signed a non-binding memorandum of understanding to target new resource development opportunities in Australia beyond their Karara iron ore joint venture in Western Australia's mid-west region.
Managing director Garret Dixon said Ansteel was happy with the Karara relationship and wanted to extend it.
"We see some short-term opportunities and into the future," Mr Dixon said.
"It allows us to build a much larger mining house.
"With all these projects, for a company like Gindalbie you need a big brother and Ansteel not only provide the offtake but they also have access to capital, which is so important.
Start of sidebar. Skip to end of sidebar.
End of sidebar. Return to start of sidebar.
"We have just been through a financial crisis and the strength of our relationship with Ansteel has shown that our projects just kept on going."
Ansteel, China's second-biggest steel producer, took a 50 per cent interest in Gindalbie's Karara iron ore project and a 36 per cent stake in the company in a $500 million deal signed last year.
According to the Perth miner, under the new deal the two companies would target assets in the carbon steel materials sector, namely metallurgical coal, manganese, chromite and nickel, as well as downstream processing opportunities such as pellet plants and steel mills, to capture the increasing demand from China.
Mr Dixon, who was in China to attend the annual board meeting with Ansteel, said there was a positive mood in the economic powerhouse.
"For the guys we talk to business is good," he said.
"When you look back 12 months ago there was a grim look on their faces but they are smiling again and want to push on and talk about new opportunities."
He said Gindalbie had already identified a number of attractive opportunities in the carbon steel materials space and would now "step up" its search for new projects
GBG Price at posting:
97.8¢ Sentiment: Buy Disclosure: Held
