Sinosteel gets control, but likely to have company at Midwest
Okay, they have more than 50%, but they are probably not going to get 100%, and that sort of makes their life hard. They are going to be stuck in never-never land like Portman. They’re going to have shareholders whom they are going to have to take care of, and a stock market listing that they are going to have to maintain. The real interesting bit is going to be seeing how Sinosteel deals with having a listed company. Can they deal with the regulations and the paper work?
This, however, leaves them with a stock market listing where they could maybe stick other assets and raise money if they wanted to. I am just not sure if the Chinese have a need like the Indians do for capital. If it were an undercapitalized Indian company gaining control of Midwest, this listing would make a lot of sense to keep. However, it seems China has lots of capital to place, and not enough places to put it, so the public company will probably have less value than it would if they were short on capital.
So Sinosteel now has an iron ore resource in the hinterlands of Australia. It has to deal with Murchison, Mitsubishi, and the Australian government, not to mention a few remaining shareholders, before it can develop it. It’s going to be quite a mess and good fun to watch.
Benjamin
