SHANGHAI (AP) -- Chinese steel maker Baosteel Group said Friday it has agreed to invest 286 million Australian dollars ($240 million) for a 15 percent stake in Australian coal and iron ore miner Aquila Resources Ltd.
Under the strategic cooperation agreement announced Friday, Baosteel will buy up to 43.95 million Aquila shares at A$6.5 per share, to take a maximum stake of 15 percent in the Perth-based miner, the companies said in announcements.
Shanghai-based Baosteel is among many Chinese companies seeking to expand and diversify their access to overseas resources to help meet demand at home.
The deal comes as Chinese steelmakers and Australian iron ore producers remain at odds over pricing for this year's iron ore shipments -- long a source of contention.
The agreement with Aquila includes a 12-month standstill agreement that prevents Baosteel from taking an interest greater than 19.99 per cent in Aquila, subject to certain exemptions.
The parties will also jointly "fast-track" the development of Aquila's steel raw materials projects including iron ore, metallurgical coal and manganese, Aquila said in a statement.
Shares in Aquila jumped 60 Australian cents, or 9.16 per cent, to A$7.15 after emerging from a trading halt that began Wednesday.
Baosteel's shares fell 3.8 percent to 6.90 yuan on Friday.
One of China's biggest steel makers, Baosteel will have a preferential opportunity to directly in invest in most of Aquila's projects and will provide support in sourcing financing from Chinese institutions for the projects, Aquila said.
"For Baosteel, this represents its first major international strategic investment in a public company and is an important transaction in Baosteel's strategy to secure long-term supply of critical steel raw materials for its steel making business," Aquila said.
The miner said the deal would facilitate its own expansion, enabling it to become "one of Australia's leading globally diversified steel raw materials producers."
The deal requires regulatory approvals both in Australia and China.
Baosteel vice president, Dai Zhihao, was nominated to join Aquila's board.
Aquila has a 50 per cent stake in the Isaac Plains coal mine in central Queensland's Bowen Basin, which produces about 75 per cent metallurgical coal and 25 per cent thermal coal.
It has several other projects in the same region, including the wholly-owned Washpool hard coking coal project, which it plans to develop as an open-cut mine.
In Western Australia, Aquila and iron ore miner Fortescue Metals Group Ltd are considering the shared development of port facilities at Anketell Point near Cape Lambert, which would provide an export path for iron ore from Aquila's 40 per cent held West Pilbara project.