Aquila Says Chinese Mills Seek Stake in A$3.9 Billion Ore Mine

May 29, 2008

May 29 (Bloomberg) – Aquila Resources Ltd., controlled by Australian billionaire Tony Poli, said Chinese steelmakers are interested in buying a stake in a proposed A$3.9 billion ($3.8 billion) iron ore project to secure supplies of the raw material.

“There is as lot of interest in off-take, in equity participation in the project,” in the Western Australian project, Poli, chief executive officer of the Perth-based company, said today in a phone interview. Aquila also produces coal in the Bowen Basin in Queensland state.

Chinese companies are snapping up mining assets in Australia to ensure supplies for the world’s fastest-growing major economy. Acquisitions of coal and iron-ore assets in Australia, the world’s largest exporter of the raw materials, will rise as steelmakers try to reduce costs, UBS AG said in a May 21 report.

“We have had no serious approaches,” Poli said by phone from Perth. “The board controls about 50 percent of the company so the best way of looking at it is we will certainly use that shareholding to discourage any unattractive offers. But equally it can be used to encourage offers that fully value our assets.”

Aquila fell as much as 84 cents, or 5 percent, to A$16.01 on the Australian stock exchange and traded at A$16.69 at 2:33 p.m. Sydney time. It has a market value of A$4.1 billion.

Poli is the company’s largest shareholder with his 30.5 percent stake worth about A$1.2 billion according to Bloomberg calculations.

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