Squire Patton Boggs has acted for Chinese-owned YGH Australia Investment Pty Ltd (YGH), which has entered into an agreement to acquire a 50% stake in the Thunderbird Mineral Sands Project, being the flagship undertaking of mineral sands miner Sheffield Resources Limited (Sheffield). YGH’s acquisition is through an investment of AU$130.1 million into the Thunderbird Project. YGH also previously acquired a 9.9% stake in Sheffield for AU$13 million and entered into an offtake deal pursuant to which YGH’s Hong Kong-based parent, Yangang (Hong Kong) Co., Ltd, will take 100% of ilmenite production from the Thunderbird Project.
Squire Patton Boggs also acted for YGH in connection with its Foreign Investment Review Board approval for the transaction, which was recently obtained, enabling the joint venture to proceed.
Completion of the joint venture arrangements will enable Sheffield to complete a bankable feasibility study ahead of negotiating project financing arrangements, which will, in part, fund the AU$478 million total funding requirement for stage one of Thunderbird. The development of the project is expected to create somewhere in the order of 400 Australian construction jobs and 200 Kimberley-based operational roles over the project’s 37-year mine life.
The managing partner of Squire Patton Boggs’ Perth office, and head of the Australian Asia Desk, Tony Chong, led the legal team advising YGH. He noted: “It is a very significant project for the Kimberley region. The joint venture is a perfect example of what two willing commercial strategic partners can achieve despite the COVID-19 environment, the litany of distance, the political sensitivities of the times, the complexity of regulatory issues and the cultural and language barriers. We are very pleased to have been able to act for our long-term client Yansteel as a guide through such barriers.”
The team from Squire Patton Boggs acting on this transaction included Tony Chong, Tina Zhou, Josh Walsh and Blair Strickland. Sheffield Resources was advised by Jones Day.