Shares spike at Aquila after Baosteel lifts stake

SYDNEY – Shares of Australia's Aquila Resources briefly rose more than 6% on Thursday after the company said one of China's largest steelmakers, Baosteel, had raised its stake to almost 20%.

The stock climbed as high as A$2.25, or by A$0.13 before falling back. At 03:00 GMT it stood 2% higher at A$2.16.

Baosteel bought 19-million Aquila shares, or 4.6% of all outstanding shares, taking its stake to just under the 20 percent threshold where it would need to declare its takeover intentions under Australian securities rules.

Baosteel initially acquired a 15% interest in 2009 and has a representative on the company's board.

Aquila in a statement said it took Baosteel's move as a "sign of support" for its undeveloped West Pilbara iron-ore project.

China, under its five-year plan, has said it aims to secure half its imported iron ore from mines owned or co-owned by Chinese firms by 2015, up from 15% in 2011.

Aquila's executive chairman, Tony Poli, was not available for comment. A company spokesman said it was not immediately apparent if the stock was acquired by Baosteel on or off market.