Shares in Fortescue Metals Group Ltd rose after China's National Development Reform Commission (NDRC) approved Hunan Valin Iron and Steel Group Company Ltd's proposed investment in the iron ore miner.
Fortescue shares were up eleven cents, or 4.37 per cent, at $2.63 at 1119 AEST.
Federal treasurer Wayne Swan last month approved the $645 million deal which, if successful, will see the Chinese state-owned steelmaker lift its stake in Fortescue to 17.33 per cent, from 9.79 per cent.
"The NDRC approval was the key milestone for the transaction and paves the way for the Chinese Ministry of Commerce and the State Administration of Foreign Exchange to formalise the agreement," Fortescue said in a statement on Wednesday.
"Once this is done, all conditions under the agreement will have been satisfied to enable Valin to proceed with its acquisition of 260 million new Fortescue shares issued at a subscription price (of) $2.48 per share."
The placement will make Hunan Valin the second largest shareholder in Fortescue, behind the miner's chief executive Andrew Forrest.
Source: WA Today
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