Chinese steelmaker Ansteel is upping its stake in an Australian iron ore mining project that it co-owns with Gindalbie Metals.

Ansteel's current 50% stake in the project has been increased to 52% after the Chinese steelmaker converted $60 million of loans into shares to provide extra funding for the Karara mine, which is 200km east of Geraldton in Australia's mid-west.

A further cash injection by the Chinese of US$230 million reduces Gindalbie's stake to 38% and provides much needed working capital.

The Chinese move comes at a time when the Karara mine faces financial problems. Since 2012 its shares have fallen in value by 82% and is in debt to the tune of $2.5 billion. Ansteel's money will alleviate the situation and take the pressure off of Gindalbie.

Ansteel's vice president, Chen Ping, has been appointed managing director of the mining project (he is currently chairman).

Source: ABC News.