China to buy major African iron ore project for $1.45 billion

The Hanlong Group, a privately owned Chinese company, is planning to take over Australian mining company Sundance (ASX:SDL) early next year and gain control over the Mbalam iron ore project in central west Africa, China's official Xinhua News Agency reported Saturday.

According to the agency, Hanlong executives said on Friday that the acquisition process was to start on February 26 and end March 1 after the submission of documents to Australian authorities.

In the Fall, Sundance Resources said it had accepted a revised takeover offer from Hanlong in a deal worth about $1.45 billion.

The acquisition would hand Hanlong control of Mbalam, a project considered key for the supply of iron ore in Africa, which straddles the Cameroon and the Republic of Congo.

The mine holds 865 million to 925 million tonnes of iron ore, Xinhua reported, citing what it said was an initial estimate. The agency also cited unnamed observers as saying Hanlong's control of the mine would give China more influence in setting international iron ore prices.

Major investments and acquisitions by China in natural resources projects overseas, including Africa, have helped fuel its rise to become the world's second-largest economy.

Based on Xinhua’s report, the Hanlong Group has combined assets of 36 billion Yuan ($5.7 billion) with ownership or stakes in more than 30 firms.