Wuhan Iron and Steel to raise USD$2.4 billion for purchase of iron ore assets

Shanghai-listed Wuhan Iron and Steel Co. unveiled plans on Tuesday to raise 15 billion yuan (USD$2.4 billion) via private placements to purchase a swathe of mining assets from its parent company for the purpose of reducing its dependency upon external iron ore sources.

Global Times reports that the steelmaker will raise the funds from less than 10 investors for the purpose of buying iron ore assets from parent company Wuhan Iron and Steel (Group) Corp), including WISCO Minerals Co., WISCO International Resources Development & Investment, WISCO Brasil Investimentos em Metalurgia and WISCO (Australia) Proprietary.

Wuhan Iron and Steel's share price leaped 5.35% in Tuesday following the end of suspension of trading for almost a month-long period.

Analysts expect the move to make the steelmaker less dependent upon external iron ore sources, with the Liberian project alone set to produce 1 million tonnes of iron ore concentrate next year.