China Steel Corp’s (中鋼) board yesterday approved plans to increase capitalization at its subsidiary in Australia to allow the foreign unit to proceed with mining investment there.
The company, the nation’s only integrated steelmaker, said it would increase the paid-in capital of CSC Steel Australia Holdings Pty Ltd by US$270 million, according to an e-mailed statement.
The latest capital increase came after the company injected NT$91.5 billion (US$3.13 billion) into its Australian subsidiary in March.
Its continued capital infusion in the unit is part of China Steel’s efforts to enhance self-sufficiency in raw materials and lower procurement costs.
On Feb. 21, China Steel announced plans to buy a 10 percent stake in Australia’s MCG Coal Holdings’ MDL162 coal mine in Queensland for A$102 million (US$106 million) via its Australian subsidiary, aiming to obtain up to 600,000 tonnes of metallurgical coal a year.
However, the company dropped the deal in June after Peabody Energy Corp, the major shareholder of MDL162, opted to execute its priority right to increase its stake.
On April 27, China Steel said it planned to invest A$305.2 million in a 2.5 percent stake in the Roy Hill Project iron ore mine in Western Australia, which would help it secure 1.38 million tonnes of iron ore a year.
The company’s board yesterday also agreed to sell as much as NT$20 billion (US$689.6 million) in bonds in Taiwan next year, China Steel said in the statement.
It said the non-collateralized bonds will reach maturity in seven years at earliest, with a yield of less than 2 percent, and the company plans to use the proceeds to enhance its working capital.
China Steel, based in Greater Kaohsiung’s Siaogang District (小港), has not set a date for the bond issue or its pricing.
The company also plans to invest NT$2.27 billion in revamping a hot-rolled steel plant’s electronic control system, according to the statement.
The five-year project aims to improve its operational efficiency and reduce electricity consumption by its facilities, while cutting the company’s carbon dioxide emissions by 2988.56 tonnes a year, the company said.
Shares inChina Steel ended 0.36 percent lower at NT$27.3 yesterday in Taipei trading, marking a decline of 5.21 percent so far this year, Taiwan Stock Exchange data showed.