Merger of Kingstream Resources NL and An Feng Steel Co Ltd welcomed

3/1/97

Resources Development Minister Colin Barnett has welcomed and congratulated Kingstream Resources NL and An Feng Steel Co Ltd on the merger of the two companies announced today.

Mr Barnett said he was pleased that the new company, to be known as An Feng Kingstream Steel Ltd, would be listed as an Australian company and would be based in Perth.

"The merger is a significant milestone for the two companies in light of their intention to jointly develop the $1.4 billion Mid West Iron and Steel project," he said.

"I consider the merger a major advance in the commercial arrangements of the two companies and I would expect that the financial structure for the Mid West Iron and Steel project would now be firmly in place.

"The decision to merge the two companies represents a significant step forward to the commitment of high value-adding of iron ore through the production of steel, which has been made possible by lower gas prices as a result of deregulation of the energy industry."

Mr Barnett said the State Government would continue to work closely with An Feng Kingstream Steel Ltd to develop the Mid West Iron and Steel project at Oakajee near Geraldton.

He said the project would be the first major industrial development in the Mid-West for some time. He expected it to be the first of several major projects to come which would be boosted by the development of Oakajee as Western Australia's next major industrial estate.

"The proposal to develop Oakajee as an industrial site with a deep water port is currently being studied," the Minister said.

"The suitability of the site still needs to be verified technically, financially, economically and environmentally before any development work proceeds."

Mr Barnett said the Department of Resources Development was in the final stages of negotiating the project's State Agreement and he expected that this could be presented to the new State Cabinet in February.

Media contact: Justine Whittome (09) 222 9699