Murchison abandons merger with Midwest

Murchison Metals, the Australian iron-ore miner, has reported that its proposals for a merger with Midwest have been abandoned.

The company has been in further discussion with Sinosteel, which owns 45.6% of Midwest, and says it has been unable to secure the Chinese group’s support for the proposal on acceptable terms.

Murchison’s executive chairman, Paul Kopejtka, believes the move could have given tremendous value to both Murchison and Midwest by combining the assets of both companies.

According to Mr Kopejtka, the miners have highly complementary projects with similar ore types that are located in the same geographic region and are reliant on the same port and rail infrastructure.

Murchison says it will remain open to discussions with the Midwest Board regarding the synergy benefits that have so far been identified.

It is understood that Sinosteel is keen to gain outright control of Midwest but Murchison is rejecting the current $6.38 offer made by the company for its 10% stake in Midwest, preferring instead to remain as an independent shareholder.