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Sat, Mar 28, 2009 - Page 10 News List

PRC firm's bid for OZ Minerals blocked

CHINA MINMETALS The blocked deal would have given control of a mine near the world’s biggest land-based missile testing site to China’s largest trader of metals


China Minmetals Group (五礦集團), China’s biggest trader of metals, had its A$2.6 billion (US$1.8 billion) takeover offer for OZ Minerals Ltd blocked by Australia because of the proximity of a mine to a weapons testing site.

The Woomera weapons testing range “makes a unique and sensitive contribution to Australia’s national defense,” Australian Treasurer Wayne Swan said today in an e-mailed statement.

The deal can’t be approved if it includes the Prominent Hill mine, though the government will study alternative proposals, he said.

Australian lawmakers last week voted to begin an inquiry into investment by foreign state-owned companies and sovereign funds after a backlash over the Minmetals bid and Aluminum Corp of China’s (Chinalco, 中國鋁業) planned A$19.5 billion funding of Rio Tinto Group.

The offer from Minmetals and Rio’s deal with Chinalco is part of US$22 billion in investments announced by Chinese state-owned companies last month as the world’s biggest buyer of metals sought to capitalize on a plunge in the value of mines.

OZ Minerals, halted from trading on the Australian stock exchange yesterday, last traded at US$0.555 on Wednesday. Minmetals has offered US$0.825 a share for the company. Melbourne-based OZ Minerals plunged 84 percent last year as metal prices slumped and debt levels rose.

Australia’s Foreign Investment Review Board (FIRB) extended its probe of the takeover by Minmetals by as long as 90 days from last Tuesday, OZ Minerals said this week.

“OZ Minerals is now in discussion with Minmetals regarding possible changes to the proposed transaction structure in light of the Treasurer’s statement and will make a further announcement in this regard as soon as possible,” chief executive officer Andrew Michelmore said in a statement to the exchange.

“Minmetals remains in discussions with FIRB,” Ian Smith, an Adelaide-based outside spokesman for the Chinese company, said in an e-mailed statement. “Our focus is on delivering an agreed solution to OZ Minerals that meets national interests, can satisfy lenders, deliver stability to employees and protect existing operations.”

BHP spokeswoman Samantha Evans was not immediately able to be contacted.

“Discussions between the Foreign Investment Review Board and Minmetals are continuing in relation to OZ Minerals’ other businesses and assets,” Swan said. “The government is willing to consider alternative proposals relating to those other assets and businesses.”

Woomera, about the size of England, is the largest land-locked missile-testing range in the world and previously included testing for nuclear weapons, its Web site said.

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