Mitsubishi Corp Acquires Jack Hills Iron Ore Mine in Australia

Mitsubishi Corporation announced on Thursday the firm contracted to buy Jack Hills iron ore mine and infrastructure assets in Western Australia at A$ 325 million from Murchison Metals (MML) through Mitsubishi Development which is the subsidiary of Mitsui Corp in Australia. Mitsui Corp acquires 100% share of MML and sets condition for development when Mitsubishi Corp almost advanced feasibility study. Mitsubishi Corp eyes cooperation with other partners as of the actual development and plans to advance the large project with total A$ 9.6 billion capital expenditure.

Mitsubishi Corp acquires 50% shares in Crosslands Resources (CRL), the iron ore miner, and 50% shares for related infrastructure assets held by Oakajee Port and Rail (OPR). Procedures are expected to complete until the end of March 2012. Mitsubishi Corp will have whole control shares in CRL and OPR by this latest acquisition. Mitsubishi Corp plans to transfer interests of the mine to potent partners such as investors. South Korean steel maker, POSCO has already invested in MML partially.

CRL, Mitsubihi Corp and MML have implemented feasibility study on the project but the project grew stagnant by financial difficulty at MML. Mitsubishi Corp now aims to lead feasibility study and bring the project toward commercialization by this acquirement.

CRL has carried out iron ore test production at 2 million tonnes per year at Jack Hills iron ore mine and has advanced research for other large size development projects. CRL announced the conclusion of the feasibility study in July 2011 which reported the mine development for 23.4 million tonnes of annual output requires capex at A$ 3.7 billion as well as construction of railway and port for iron ore shipment at 45 million tonnes per year requires A$ 5.94 billion.