Mt Gibson probes association between Chinese parties

It appears that two of Shougang Corporation's subsidiaries have accrued a greater than 20 per cent stake in the Western Australian company.

Under Australian corporate law, acquiring a greater than 19.9 per cent interest in a company requires the purchaser to launch a formal bid.

The company of Russian businessman Alisher Usmanov, Gazmetall Holdings Cyprus Ltd, conditionally sold its 19.73 per cent stake in Mount Gibson to Shougang Concord.

Shougang Hong Kong owns more than 20 per cent of Shougang Concord and about 18.05 per cent of the shares in APAC Resources Ltd, which in turn owns 20.22 per cent of Mount Gibson.

Shougang Corporation is the ultimate parent entity of Shougang Hong Kong.

Mount Gibson on Thursday issued a statement saying it is making inquiries in relation to the transaction.

"From the information that they've put out, they're not declaring that there is an association (between the Chinese companies). So by inference, they're saying that they're separate entities," Mount Gibson managing director Luke Tonkin told reporters.

In an attempt to quell media and market speculation that it was the focus of a takeover, the $2 billion iron ore miner said it had "not been informed by Shougang Concord or Shougang Corporation that it intended to make an offer to all of Mount Gibson's shareholders".

"We haven't received any advice that Shougang intends to make a bid for all of the other shares in the company," Tonkin said.

"So the board has an obligation to have a very close look at the structure of the deal and also whether the parties are associated.

"But at this stage, we're still going through that inquiry and it is obviously a very complex document, which I'm wading my way through now.

"Advisers are working on it," Tonkin said.

"We will act as a board in the interests of all of our shareholders."

He said that Mount Gibson's largest shareholder, APAC, was allowed under the Corporations Act to amass a greater than 20 per cent stake over a six-month period under "a creep provision".

With the media spotlight on increasing Chinese investments in Australia's mining sector, iron ore explorer Australasian Resources Ltd is keen to allay fears that Shougang Corporation could target it for a takeover.

Australasian managing director Andrew Caruso told reporters that Shougang, one of its major shareholders, was very much its project partner, not a threat.

"We have a very open and constructive relationship," Caruso said.

"On a fully diluted basis, collectively, with APAC Resources and Shougang's wholly owned subsidiary, they hold about 15 per cent.

"They haven't indicated specifically that they wish to increase that holding to us, but I guess you couldn't rule that out in future.

"The difference to Mount Gibson's share register is that our share register is pretty tightly held: we've got (Mineralogy and Gladstone Pacific Nickel chairman) Clive Palmer holding 60 per cent, fully diluted."

Australasian is working towards forming an equally held project company with Shougang for the Balmoral South iron ore project in WA.