Hebei Steel invests in Canadian iron ore miner

Hebei Iron & Steel Group Co got approval from the National Development and Reform Commission to invest in Canadian iron ore developer Alderon Iron Ore Corp.

Hebei Steel, the largest steel producer by output in the country, said in April that it would invest C$88.3 million ($88 million) for a 19.9 percent stake in Alderon and spend C$105.7 million ($105 million) on Alderon's 25 percent interest in the Kami project, according to China Business News on July 9.

The project, located in Canada's Labrador Trough and with water, power and port facilities, has iron ore reserves of about 1 billion tons, with an expected output of 8 million tons after it is put into operation in 2015.

Hebei Steel will have priority rights to buy 60 percent of the annual iron ore output from the project.

The deal shows China's efforts to reduce its dependence on iron ore imports and gain more control over foreign resources.

According to the company's plans, it will own total resources of 7.2 billion tons domestically and 800 million tons abroad by the end of 2015, aiming to raise its iron ore self-supply percentage from the current less than 9 percent to 40 percent.