AAP reported that China's Sinosteel will likely turn its attention to Murchison Metals to further secure its supplies of iron ore after gaining control of Midwest Corporation.
Mr James Wilson DJ Carmichael analyst said that “Sinosteel have secured a production base by taking over more than 50% of Midwest, so anything else is cherries on top and that's probably what Murchison would be.”
He added that “It is an obvious next step, it makes the right sense to have Murchison and Midwest together.”
Sinosteel second largest iron ore trader secured 50.97% of iron ore miner Midwest through an AUD 1.36 billion takeover. Midwest and Murchison hold neighboring ground and operate modest iron ore mines in WA’s mid west region. Analysts estimate that cost savings up to AUD 400 million could be achieved through a tie up of the two companies. Murchison proposed in May a merger with Midwest but was forced to terminate the proposal this week after failing to gain support from Sinosteel, Midwest's largest shareholder.
MMX Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
