Wuhan Iron and Steel Corp has signed a deal with Canadian Adriana Resources Inc, (ADI) to take a stake in an iron ore project in Lac Otelnuk, Quebec. It is the latest example of Chinese companies buying overseas assets to guarantee iron ore supplies.

In January, Wuhan Steel and ADI signed a binding framework agreement under which Wuhan will pay C$120 million for a 60 percent stake in a joint venture that will develop the Lac Otelnuk project. The deal will give Wuhan Steel a 19.9 percent stake in ADI through a private placement, and the right to nominate a director to ADI's board.

Lac Otelnuk has reserves of approximately 6 billion tons of medium grade iron ore, but mining costs are low.

ADI has iron ore assets in Brazil and Canada, and sees China as its main market.

Canada has a relatively relaxed policy on foreign investment so it is attractive for Chinese companies, a source at Wuhan steel said.

China's business press carried the story above on Thursday. China.org.cn has not checked the stories and does not vouch for their accuracy.

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