The green light allows Baosteel to take a 19.99% stake in the company, although the current investment proposal will give the Chinese steelmaker 15% (43.95 million shares) of Aquila at $6.50 per share.
The cash injection will allow Aquila to fast-track its iron ore, coal and manganese projects.
Under the deal, Baosteel has also agreed to work with Aquila to source low-cost financing from Chinese financial institutions for most of its projects.
Baosteel will also be given preferential opportunity to directly invest in and codevelop most of Aquila’s projects.
The deal is still subject to Chinese regulatory approvals and is expected to be finalised in the second half of November.
Aquila shares are up 37c this morning to $7.55.