(Reuters)
Updated: 2007-06-04 09:00

China's Anshan Iron & Steel Group has agreed to take a 12.94 percent stake in Australian iron ore miner Gindalbie Metals Ltd., the latest move by a Chinese firm seeking Australia's raw materials to feed surging domestic demand.

Gindalbie said in a statement on Monday it would issue 65 million shares at 60 cents each to Anshan's Hong Kong-based investment unit, Angang Group, raising A$39 million ($32.5 million).

The funds will be used for investment in Gindalbie's Australian iron ore operations, which it runs in a joint venture with Anshan.

Chinese firms have stepped up investment in Australia's mining sector in recent months, seeking stable supplies of raw materials to meet surging domestic demand. Last week, tin producer Yunnan Tin took a 5 percent stake in nickel miner Metallica Minerals Ltd. MLM.AX.

Aluminium giant Chalco 2600.HK is developing a bauxite mine in northern Australia, while two Chinese firms last month signed iron-ore deals with Australian steel firm OneSteel Ltd.