(China Knowledge, Sep 11, 2006)--Mitsui & Co. Ltd., Japan¡¯s second-largest trading company, last week announced that it would invest about ¥18 billion to acquire a 25% stake in Erdos Electrical Power & Metallurgical Co. Ltd. (Erdos EPM), a company based in the Erdos city of the Inner Mongolia Autonomous Region of China.

Mitsui is hoping that its investment in Erdos EPM, which is part of the Erdos Cashmere Group, will allow it to gain a foothold in the power generation and coal development in the west of China, as well as secure a supply of ferrosilicon and other ferrous alloy products for its Japanese market.

Under the agreement, Erdos EPM will transfer the 25% stake through a third-party allotment of newly-issued shares. Mitsui will also purchase a number of shares from an existing shareholder.

As part of the deal, Mitsui will also assist in the marketing and supply of ferrosilicon and ferrous alloy products in Japan, as well as in other export markets. Ferrosilicon is used in the manufacture of steel.

The investment represents Mitsui¡¯s largest ever investment in China.

Erdos EPM was established in 2003. The company has managed to optimize its use of the rich coal reserves in the surrounding area to engage in four major businesses: power generation, coal mining, ferrous alloy production, and the pumping of water from the Yellow River.

Following Mitsui¡¯s proposed acquisition of the 25% stake, Erdos Cashmere will own 70.8% of Erdos EPM.

Prior to this deal, Mitsui had partnered with Erdos EPM and the JFE Steel Corp. to establish Inner Monoglia Erdos EJM Manganese Alloy Co. Ltd. in 2004.
Source:China Knowledge
tag:China energy coal