A Chinese mining company has withdrawn from a deal with Nevada mining company Firstgold after the administration of US President Barack Obama objected on national security grounds, Firstgold’s chief executive said on Monday.
“They [the Chinese firm] basically let me know it was a tough call, but they felt they would not have success with the appeal and didn’t feel it was in their best interest to push forward,” Firstgold CEO Terry Lynch said.
China’s Northwest Nonferrous International Investment Co had struck a US$26.5 million deal with Firstgold to buy 51 percent of the company and help develop the Relief Canyon mine near Lovelock, Nevada.
The companies were told last week by the Committee on Foreign Investment in the US the deal raised national security concerns because of its proximity to US military installations, Lynch said.
The interagency panel headed by the US Treasury Department was expected to send Obama its recommendation on Monday that the deal be rejected.
But Lynch said Northwest’s withdrawal meant the deal was dead so Obama would not have to decide the issue.
“It’s terribly disappointing. I understand Northwest’s position. They’re just a mining company looking to grow their mining portfolio globally,” Lynch said.
Firstgold owns several mining properties in Nevada it hopes to develop. The Relief Canyon mine is within 95km of Fallon Naval Air Station.
Separately, Australian agri-chemical firm Nufarm said it would consider a revised, lower takeover offer from China’s Sinochem, but would not agree to a bid that undervalued the company.
Sinochem’s new offer values the company at A$2.62 billion (US$2.3 billion), Dow Jones Newswires said, down from A$2.84 billion in September.
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