Wuhan Iron and Steel Co (WISCO) has signed a framework agreement with Canadian mining company Adriana Resources for a joint-venture to construct and operate an iron mine in Canada, China Business News reported Wednesday.
WISCO will invest C$120 million ($121 million) to purchase a 60 percent stake of Adriana's Lac Otelnuk project in Quebec, East Canada, said the newspaper, citing Adriana's announcement.
Meanwhile, by means of issuing additional new stocks, WISCO will also get 19.9 percent of Adriana's ownership and a seat at the board of directors, it said.
According to the agreement, WISCO will seek 70 percent of the loans for the Lac Otelnuk project after conducting a feasibility study. Adriana has said on one occasion that the project would cost about C$600 million, it reported.
However, the report also pointed out that the final joint-venture deal will only be realized after getting approval from the Chinese government and regulatory authorities.
This is not the first time WISCO has invested in Canada. In July 2010, the company paid $240 million for a 19.9 percent stake of a Canadian iron ore company CLM, the report said.
The steelmaker also invested iron ore mining projects in Australia and Brazil after the world financial crises, the report said.
WISCO has an annual production capacity of 20 million tons, ranking third in China, according to the company's website.>
