The Australian government on Thursday approved a 271-million-Australian-dollar (245.7 million U.S. dollar) investment by China's third largest steel maker in iron ore explorer Centrex Metals Ltd..

The company plans to build a new export port in South Australia with its proposed Chinese joint venture partner.

The Foreign Investment Review Board has unconditionally given the green light to Wuhan Iron & Steel (Group) Co (WISCO) earning a60-percent stake in the iron ore rights to five Centrex-owned tenements on South Australia's Eyre Peninsula.

Centrex said WISCO was now gaining approval for the deal from China's State Department of Commerce.

To earn its interest in the iron ore rights, WISCO will pay about 10.1 million Australian dollars (9.1 million U.S. dollars) to take a 15-percent stake in Centrex via a placement of 40 million new shares at a heavily discounted price of 22.6 U.S. cents per share.

WISCO's stake in Centrex reduces to 13.04 percent post-issue, so the placement does not require shareholder approval as it fall sunder the 15 percent threshold applying to foreign acquisitions.

Centrex chairman David Lindh said Centrex aimed to be a major player in Australia's iron ore industry.

"All of the cornerstones are now in place to rapidly escalate our iron ore growth on the Eyre Peninsula into a billion dollar business, with further and considerable multi-project development opportunities," he said.