(China Business News)
Updated: 2007-08-18 10:21

China's Fosun Group will take 60 percent stake in the 1.5 million yuan Hainan Mining United Co through two subsidiaries, the company said in a statement to the Hong Kong Stock Exchange yesterday.

The venture will receive 900 million yuan ($122.06 million) from Fosun, while Hainan Iron & Steel Co (Hainan Steel), which owns the remaining 40 percent stake, will contribute its share of capital in forms of land use, building and mining rights, and mining and manufacturing equipment.

Fosun has pledged to transform Hainan Steel into an integrated steel maker, focusing on mining in China's Hainan Province and to reduce the environmental impact through a restructuring project, according to a report by Xinhua news agency.

Fosun Group initiated talks to purchase part of Hainan Steel in 2005 with the aim of developing both the steel and real estate industries on the island province of Hainan.

Fosun International Ltd, China's largest diversified private company, raised HK$13.3 billion ($1.7 billion) from a Hong Kong IPO in July in order to finance its expansion in businesses spanning pharmaceuticals, steel, mining, retail and financial services.

Hainan Steel is a major iron ore supplier to Chinese steel makers including Baosteel and Wuhan Iron & Steel Corporation Limited.