Australia's Gindalbie Metals Ltd said it has finalized an A$534-million (US$481 million) funding agreement with Chinese partner Anshan Iron & Steel Group (known as Ansteel) to invest in the A$1.8-billion Karara iron ore project.

Ansteel has made its first A$50-million payment and will invest a further A$322.1 million this year with three further payments, Gindalbie said yesterday.

Gindalbie said it will commit A$162 million to the funding package through two payments.

Shares of Gindalbie rose 11.76 percent on the Australian Stock Exchange yesterday to close at A$0.85.

Ansteel has agreed to fully underwrite the debt component of the funding structure if required, said Gindalbie Managing Director Garret Dixon.

The Karara project is located in the mid-western region of Western Australia, and first production is expected in 2009. Total cost for developing the Karara mining project, including a pellet-making plant in northeastern China, is estimated at A$1.8 billion.

Gindalbie has a 50-50 joint venture with Ansteel to finance and develop Karara and Mungada, another mining project nearby.

(Shanghai Daily February 13, 2008)