Chinese steel company to invest in SA

China's third largest steel group is to take a major stake in the operations of Adelaide-based mining company Centrex Metals.

The Wuhan Iron and Steel Group will invest up to $180 million for the share in selected iron ore projects on Eyre Peninsula.

It will also take a strategic 15 per cent direct stake in Centrex, for around $10 million.

Centrex says the Chinese company will also work to jointly develop a deep water export port on Centrex-owned land near Tumby Bay, on Spencer Gulf.

Centrex chairman David Lindh says it is a landmark deal.

"This is in our view a company maker for Centrex Metals, this is a deal with Wuhan Iron and Steel which will be a long-term relationship with this company," he said.

The announcement has failed to boost Centrex shares, which have been down around four per cent in value after a trading halt leading up to today's announcement.

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