TCM producer turns attention to Tadong iron ore mine
Shanghai. May 7. INTERFAX-CHINA - Jilin Aodong Medicine Industry Group
Co. Ltd., a Shenzhen-listed producer of traditional Chinese medicines
(TCM), inked an agreement to purchase a 30 percent stake in Tonghua
Steel Group Dunhua Tadong Mining Co. Ltd. for a total of RMB 309.2
million ($44.27 million), Aodong Medicine announced today.
Tadong Mining, established to run the Tadong iron ore mine in
northeastern China's Jilin Province, is currently controlled by a
Tonghua Iron and Steel Group subsidiary holding a 40 percent stake, with
the Jilin Provincial Bureau of Geological Exploration and Development
and Yanbian Tianchi Industry and Trade Co. Ltd. each holding a 30
percent.
Under the terms of the agreement, Aodong Medicine will assume control of
Yanbian Trade's stake for RMB 141.2 million ($20.22 million), after
which it will invest an additional RMB 168 million ($24.05 million). In
order to maintain the 4:3:3 division of shares among the three
companies, the other two shareholders will inject proportional
investments into Tadong Mining.
The deal is subject to approval from Aodong Medicine shareholders.
However, according to Aodong Medicine in a statement today, the sum will
account for only 6.71 percent of the company's net profits last year,
and as such will not impact heavily on the company's financial
performance in the short term.
Aodong Medicine has been searching to widen its businesses in recent
years through a policy of share purchases. Last year, the company
registered a main business revenue of RMB 845.15 million ($121.08
million), while over the same period, the company reported making RMB
1.99 billion ($285.10 million) from the 82 million shares it held in GF
Securities.
The Tadong iron ore mine development project requires a total investment
of RMB 2.38 billion ($340.74 million), and is designed to produce 1.2
million tons of iron ore concentrate at a grade of 65 percent, 291,000
tons of sulfur concentrate at a grade of 36 percent and 1.13 million
tons of phosphor dioxide concentrate at grade of 30 percent, every year
over a 33-year lifespan.
The Tadong iron ore mine contains 132.14 million tons of iron ore
resource reserves, as well as associated sulfur, phosphor, vanadium and
cobalt reserves, and is ranked as the largest in northeastern China's
Jilin Province.
-JJ
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