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Sichuan-based private company Hanlong Group has taken a furtherstep in its takeover bid for Australian business Sundance ResourcesLtd, a deal, once completed, will allow China to own the thirdlargest unexplored iron ore mine globally. However, analysts Sunday said it is too early to say the deal is amajor win for the country. Hanlong announced Friday on its website that it has signed arevised Scheme Implementation Agreement with Australian miningcompany Sundance, under which Hanlong will buy out 100 percent ofSundance for $1.66 billion. The buyout, which still needs approvalfrom supervisors, is expected to be completed by mid-November, theannouncement said. As Sundance runs Mbalam, an iron ore project in West Africa, thedeal will enable the Chinese company to also own Mbalam, which isbelieved to be the third largest undeveloped iron ore mine, with areserve of over 10 billion tons and annual turnover of around 35million tons of iron ore. Though some industry insiders expect the deal can help China breakthe monopoly of global giants over iron ore supply and win agreater say in global pricing, others believe it is too early tosay the country can achieve desired effects. "An annual output of 35 million tons can only meet a small part ofChina's import needs," said Zhang Lin, an analyst at the BeijingLange Steel Information Research Center. China is expected to import over 730 million tons of iron ore in2012, according to the Ministry of Industry and InformationTechnology in March. Besides, "uncertainties like strikes, which have taken placefollowing some overseas acquisitions, may also hamper a smoothoperation of the project," she said. China has heavily relied on imports of iron ore for a long time forits domestic consumption. However the reliance began to ease since2010. According to the China Iron and Steel Association in February, thecountry relied on imports for 60 percent of its consumption, downfrom some 70 percent in 2009. "Enhanced output in domestic mines and production by acquiredoverseas mines has eased the country's reliance on imports," saidZhang Meng, a tube researcher at industry consultancy custeel.com. But Zhang believes the timing of the Hanlong deal is not ideal."Five years ago, such a deal as Hanlong's would be a definite winas the global demand for iron ore was strong, but both domestic andforeign demand for iron ore is expected to steadily slump," hesaid. The peak period of demand for iron ore driven by infrastructureconstruction projects and real estate boom "has passed in China,"Zhang noted. In March 2011, Hanlong became the largest shareholder of Sundanceby taking a 18.6 percent stake in the company. The e-commerce company in China offers quality products such as China Pos Battery , China Custom Lithium ion Batteries, and more. For more , please visit Li-ion Battery Packs today!
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