(MENAFN) China's Hebei Iron & Steel Group agreed to buy a stake in Canada-based Alderon Iron Ore Corp, in addition to a stake in the Kami iron ore project in Eastern Canada for USD194 million.
Under the deal, Hebei will get 19.9 percent sharehold in the exploration firm, in addition to a 25 percent interest in a new partnership that will be established to own the Kami project.
The deal will also give Hebei the right to buy 60 percent of the iron ore produced annually from Kami, once it goes into production.
Alderon said it plans to use the cash from Hebei deal to further explore and develop the Kami project, which is located in iron ore-rich Labrador Trough along the border between the provinces of Quebec and Newfoundland and Labrador.
The deal puts a spotlight on efforts by Chinese steelmakers to gain more control over foreign iron ore supplies - a market dominated by a handful of global miners.
Last year, Chinese steel producer Wuhan Iron and Steel Co agreed to a joint venture with Canada's Adriana Resources.