BREAKFAST DEALS: Murchison twist? Alexander Liddington-Cox Published 7:43 AM, 23 Nov 2011 Last update 7:43 AM, 23 Nov 2011
Western Australia’s much-needed deep water Oakajee Port & Rail Project to open up the Midwest iron ore region was largely justified by China’s growing demand. China’s exclusion from the original agreement was a surprise to some and while Murchison Metals might have found a saviour for the project again, onlookers could be in for something unexpected. Elsewhere, Spotless Group chairman Peter Smedley is reportedly close to calming his outraged shareholders with a compromise deal to let Private Equity Partners have a look at the books. Meanwhile, Centro has but a day of breathing space before another crucial decision and TRUenergy’s owners in Hong Kong could be looking towards an IPO next year. And finally, BlueScope Steel and Cromwell Property Group turn heads with their capital raisings, and not in a good way.
Murchison Metals
Western Australian Premier Colin Barnett will be relieved to hear that Murchison Metals is set to announce a possible saviour for the embattled $5.9 billion Oakajee Port & Rail project, but there’s a surprise in store. According to The Australian, Murchison is set to offload its 50 per cent stake in Oakajee and the Jack Hills iron ore mine to Japanese investment firm Mitsubishi, its joint venture partner. Murchison is due to come out of its trading halt today and it has to give the market something. The paper says an announcement could come as early as this morning but as of last night, negotiations hadn’t been finalised.
At first glance Mitsubishi of course makes the most sense, but the Japanese giant made all the noise of a company that couldn’t shoulder the extra burden. Speculation continues to suggest that South Korea’s POSCO, which owns 14 per cent of Murchison and has a supply agreement with Jack Hills, could team up with Mitsubishi for the remaining 50 per cent stake, but all players are keeping very quiet.
Barnett has been making moves to use the vulnerable project as an opportunity to do some running repairs on the state’s relationship with China, by encouraging them to take the 50 per cent stake. But the most frequently named potential takers, Gindalbie Metals and China Investment Corporation, appear to have kept their distance from the project.
MMX Price at posting:
27.5¢ Sentiment: Hold Disclosure: Held
