Chinese steel producer Hebei Xinghua Iron and Steel Co. Ltd (XingHua) is to hold stock equities and gain iron ore mining priorities by capital injection in Dynasty Metals Australia Limited, according to the Australian firm.

Xinghua will be equipped with 40 million of new shares in Dynasty at a price of $0.13 per share and purchase 20 million options by the end of 2012, thus giving the Chinese firm control of 34 percent of Dynasty.

The cooperation with Xinghua will open doors for Dynasty on both immediate and future financial support, and Xinghua establishing a representative office in China helps Dynasty present itself to more possible partners as well as lay down a basis in the country, expressed Dynasty chairman, Ian Levy.

In accordance with the agreement, XingHua will be closely involved in the management of Dynasty as well as exploration and evaluation of all its projects. Two XingHua representatives will also be appointed to the board of Dynasty.

Established in 1985, Xinghua, located in Fujian Province, has a demand of three million tones of iron ore each year, which are imported from Australia, India and mainland China.