SYDNEY, Australia (AP) -- China's Sinosteel Corp. said Friday it has increased its stake in Midwest Corp. to 40 percent, as it pursues its takeover of the Australian miner.
The rise increases Sinosteel's chances of spoiling a rival bid for Midwest from Murchison Metals Ltd.
The state-owned Chinese company raised its stake in Midwest to 40.09 percent, or more than 85.4 million shares, from 33.82 percent Thursday, the company said in a statement to the Australian Securities Exchange.
The Chinese group needs 50.1 percent of Midwest to block a planned ''reverse takeover'' of the company by iron ore miner Murchison.
In an unusual situation, Midwest has essentially recommended both the Murchison and Sinosteel offers to shareholders.
In a deal that values Midwest at around 1.36 billion Australian dollars ($1.3 billion), Sinosteel is offering 6.38 Australian dollars ($6.10) per Midwest share. The offer ends June 13.
Government-backed Chinese steel and other companies have become more aggressive in their global effort to secure the raw materials needed to keep up with China's galloping economic expansion. Interest has increasingly fallen on Australia, the world's biggest exporter of coal and the second largest iron ore exporter.
Midwest operates a mine in Western Australia state with a modest annual production of 1.1 million tons. It is developing a new iron ore project that will produce 16.5 million tons a year, also in Western Australia.