Chinese move past Mt Gibson threshold
October 24, 2007
CHINESE investors have used creep provisions under the Corporations Law to squeeze past the 19.9 per cent threshold in rising iron ore miner Mount Gibson.
Apac Resources, which is registered in the tax haven of Bermuda but is listed on the Hong Kong Stock Exchange, now controls 160.8 million shares in Mount Gibson, or 20.3 per cent.
Normally, any shareholding in a company beyond 19.9 per cent automatically triggers the announcement of takeover intentions but under rarely used provisions in the Corporations Law, a company is permitted to gain a maximum 3 per cent of company shares every six months.
According to company records, Apac became a substantial shareholder in October last year, with a stake of 48.4 million shares, or 10.4 per cent, worth about $34 million.
Apac's stake is now worth about $443 million as Mount Gibson ramps up production at its high-grade hematite project at Koolan Island in the north of Western Australia.
Mount Gibson yesterday shipped its millionth tonne of iron ore from the site.
Company managing director Luke Tonkin said he was in constant contact with Apac representatives. "My understanding is that they like the story," Mr Tonkin said.
Mount Gibson's other big shareholder, the Cypriot-domiciled Gazmetall Holdings, controls 19.77 per cent of the company after it paid $98.8 million for a 19.89 per cent stake in November last year.
Gazmetall Holdings is linked to Russia's biggest iron ore player, Metalloinvest, and is controlled by Alisher Usmanov, who is believed to be Russia's 18th richest man, with a personal fortune of $US5.5 billion ($6.2 billion).
Not to be outdone by its Chinese rivals, Gazmetall also bought shares in Mount Gibson during August and September, after letting its shareholding slip to around 17 per cent.
According to Mount Gibson's annual report, the company improved its sales of iron ore by 78 per cent last year.
Mount Gibson wants to be producing 10 million tonnes a year by 2010 across its three WA operations.
The board has made no secret of its intentions to look for more acquisitions to further consolidate the junior end of the iron ore sector after winning last year's bitter battle for rival Aztec Resources.
Mount Gibson shares closed 14c higher at $2.76 yesterday.