The substantial holder notice lodged with the Australian Securities Exchange yesterday morning revealed that MinRes had been buying up shares in Aquila at $3.42-3.48 since May 13.
On Wednesday it bought 50.2 million shares at $3.75 from M&G Investments in a block trade, worth about $188 million.
MinRes said prior to Baosteel and Aurizon Holding making a $3.40 per share takeover offer for Aquila on May 5, it had spent a considerable amount of time developing a business case to deliver a fit-for-purpose solution for the WPIOP.
The company said it had finalised its total mine to port development plan and was ready to begin discussions with the project stakeholders with a view to enter lump sum contracts for construction and delivery of the infrastructure and build, own and operate arrangements for the mine.
As a major Pilbara iron ore player already, MinRes said it had proven experience in developing full turnkey mine operations and supply chain solutions.
“Mineral Resources has proven ability to develop world-class, large-scale iron ore projects on a fixed cost basis in the shortest possible time,” MinRes managing director Chris Ellison said.
“We are confident that we can play an important role in delivering the WPIOP on attractive terms through building the port and other infrastructure for the project and build, own and operate arrangements in respect of the mine, which we have successfully employed previously.
“We have the financial capacity to make a meaningful capital contribution towards the development of the project and will now proceed to engage with all major stakeholders including Aquila and Baosteel to facilitate the best outcome possible.”
Aquila previously flagged the possibility of outsourcing the rail and port development, which has a combined estimated direct capital cost of $4.6 billion.
MinRes said a “meaningful shareholding” in Aquila was appropriate to position the company to be actively involved in the project.
The on-market purchases were funded by MinRes’ existing cash reserves, which stood at about $191 million at the end of December.
“The board of Mineral Resources also considers that our involvement in the WPIOP is an outstanding opportunity to secure additional long-term build, own, operate contracting opportunities for our core contracting business,” it said.
Aquila is yet to make a formal recommendation on the Baosteel-Aurizon bid but yesterday welcomed the block trade due to the recognition that the value of the company’s shares was well in excess of the offer price.
Shares in Aquila dropped 3% to $3.50, while MinRes shares dropped 3.6% to $9.77.
