MIN RES

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Deal hungry MinRes chasing another iron ore play

After unsuccessfully trying to buy gas play AWE and then Atlas Iron, Ellison's company Mineral Resources finally nailed one when it bought Cleveland-based Cliffs' loss-making Koolyanobbing mine in March, but more importantly struck a joint venture deal with Brockman Mining to unlock iron ore from Brockman's long-stranded Marillana project.
And now MinRes is sniffing around another batch of iron ore assets; those owned by Kerry Stokes-backed listed miner, BCI Minerals.
Street Talk understands binding bids were due last week. BCI is seeking buyers for its iron ore portfolio, which includes its Iron Valley mine, Kumina and Bungaroo South projects, and proposed 20 million tonne-a-year Cape Preston East port facility.

Interested partners were told they could make a bid for one or all of the assets.

Street Talk can reveal MinRes is one of the final parties standing at the auction. It is understood the $3 billion miner lobbed an offer for at least one of the assets, if not all of them. The portfolio is expected to be worth about $100 million.
MinRes shapes as the obvious buyer for Iron Valley. It already operates the mine and buys its product under a royalty-type agreement with BCI, the mine's owner.
Its affinity with the asset means no one is better placed to make a judgement about the fair value of the mine than MinRes. Iron Valley produces ore with about 58 per cent iron, which makes it the type of ore increasingly unloved by Chinese steel makers as they focus on higher grade products.
MinRes clearly thinks there is an opportunity in the current market dynamic, given it has now bid on three low-grade iron ore producers in the space of six months; Atlas, Cliffs and now BCI.

Other potential bidders include BBI Group, which is run by the Todd family, Gina Rinehart's Hancock Prospecting and Fortescue Metals Group.
It is understood Flinders Resources is out of the running.
BCI announced in August it planned to divest all of its iron ore assets in the Pilbara region and had appointed PCF Capital and Gilbert + Tobin to run an auction.
Kerry Stokes holds a 28 per cent stake in BCI through his private company Wroxby Pty Ltd.