Monday, September 15th, 2014
SEOUL, KOREA - Korea Development Bank will take a 5-percent stake in the Roy Hill iron ore mine in Australia, in partnership with domestic pension fund firms and insurance companies. Given POSCO holds a 12.5-percent stake in the mine, Korean firms will take the position of a second largest shareholder if the deal goes through as planned.
The state-run bank will purchase a 5-percent stake in Roy Hill Holdings at the cost of 170 billion won by forming an "overseas resource development fund" with other Korean institutional investors. An investment banker commented, "Once the proposal passes the investment deliberation committee in the institutional investors, the investment will be made."
Roy Hill Holdings is 70 percent owned by Hancock Inc. of Australia, followed by Japan's Marubeni (15.0%), POSCO (12.5%), and Taiwan's China Steel (2.5%). Once the overseas resource development fund takes a 5-percent stake, Korean firms' stake will rise to 17.5 percent from 12.5 percent, overtaking Marubeni as the second largest shareholder. POSCO had bought a 15-percent stake in Roy Hill in 2010 but ended up selling 2.5 percent to China Steel.