MELBOURNE Nov 24 (Reuters) - Japan's Mitsubishi Corp has agreed to buy its partner Murchison Metals' stakes in an iron ore development and a port and rail project in Western Australia for $315 million, looking to rescue the two multi-billion dollar projects.
Beleaguered Murchison's shares jumped as much as 49 percent on the deal.
The A$5.9 billion ($5.7 billion) Oakajee port and rail project and the A$3.7 billion Jack Hills iron ore project have been delayed because of escalating costs and the failure to line up companies to use the infrastructure.
The Oakajee project was designed to open a second major iron ore province in Australia to challenge the dominance of global giants Rio Tinto and BHP Billiton.
Murchison is selling its 50 percent stakes in the Jack Hills project and Oakajee port and rail as it was having trouble raising its share of the funding for them.
The company said the deal values the stakes at A$0.51 a share, an 85 percent premium to Murchison's closing price on Wednesday. It last traded up 42 percent at A$0.39.
"The Murchison team has worked extremely hard to unlock value for its shareholders in recent months, and it is our view that the transaction represents a solid outcome in very challenging circumstances," Managing Director Greg Martin said in a statement.
The deal needs approval from Murchison's shareholders, including South Korean steel maker POSCO, which owns just under 14 percent of Murchison, with a vote due in February.
Martin said the company would continue to pursue talks with other parties, in case it can get a better offer.
Murchison will pay a break fee of A$3 million if it scraps the deal with Mitsubishi. ($1 = 1.0324 Australian dollars)