China's Baosteel faces competition in bid for Aquila Resources

China's Baosteel faces competition in bid for Aquila Resources

Chinese steel giant Baosteel Resources $1.3 billion takeover bid for Australian explorer Aquila Resources (TSE, ASX: AQA) may have to get a lot more attractive as a new player increased its stake in the company by buying 49 million Aquila shares.

Baosteel and its Australian partner Aurizon Holdings (ASX:AZJ) are now facing the potential competition of Mineral Resources (ASX:MIN), which also operates small iron ore mines, and now owns a 12% stake in Aquila, reports The Australian.

Shares in Mineral Resources were placed in a trading halt, pending the release of a formal announcement.

Baosteel and Aurizon are chasing Aquila for its 50% stake in the stalled $7 billion West Pilbara Iron Ore (WPIO) rail and port project and a coal mine in Queensland.

WPIO holds than 2 billion metric tons of resources, just below the 2.4 billion metric tons that Australian billionaire Gina Rinehart has at the Roy Hill project, also in the Pilbara and due to start producing next year.