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Wed, Dec 30, 2009 - Page 10 News List

PRC firms bid for Canada’s Corriente

COPPER RESOURCES China Railway Construction and Tongling would gain mining rights to deposits in Ecuador. Corriente shareholders would receive C$8.60 per share


China Railway Construction Corp (中國鐵建) and Tongling Nonferrous Metals Group Holdings Co (銅陵有色金屬集團控股) offered C$679 million (US$651 million) for Canada’s Corriente Resources Inc to gain copper resources in South America.

Corriente shareholders would receive C$8.60 per share in cash, China Railway Construction said in a statement to the Hong Kong stock exchange on Monday. That’s 14 percent more than the last traded price of the Vancouver-based company.

China has been scouring the globe for raw materials to sustain the world’s fastest-growing major economy, buying assets from iron-ore mines in Brazil to oil fields in Canada in the past year. Overseas investment by Chinese companies surged 190 percent to US$20.5 billion in the third quarter from a year earlier, the Ministry of Commerce said.

China Railway Construction, China’s biggest railroad builder, and Tongling, its second-largest copper producer, would gain mining rights to 17 deposits in southeast Ecuador.

The acquisition “is in line with the long-term strategy of the company,” Beijing-based China Railway Construction said in the statement.

The company “has added development of mineral resources as one of its principal operations,” it said.

Tongling Nonferrous Metals Group Co issued a similar statement to Shenzhen’s stock exchange yesterday, citing its “long-term strategy.”

Calls to Corriente in Vancouver weren’t answered outside of office hours.

Corriente’s board of directors said in a statement on the company’s Web site that the offer is “fair” and recommended its shareholders to accept the deal.

The company’s main assets include mining rights in the Corriente Copper Belt in Ecuador, covering 17 deposits in the four main mining regions of Mirador, Mirador Norte, Panantza and San Carlos, China Railway Construction said in the statement. Copper reserves in the four deposits are about 11.54 million tonnes, the statement said.

Corriente said in May that it planned to spend US$418 million on the start-up of its Mirador mine and was in talks with a partner that might invest as much as US$3 billion. Corriente’s reserves in Ecuador hold about US$50 billion worth of copper based on prices of about US$2 a pound, Ian Harris, the company’s country manager, said then.

Corriente is also involved in exploration and development of gold, silver and molybdenum mines, China Railway Construction’s statement said.

China Railway Construction and Tongling’s venture, CRCC-Tongguan Investment Co, will finance its offer for Corriente through bank loans and internal resources, the statement said.

The acquisition is subject to acceptance by shareholders representing a minimum of two-thirds of Corriente shares, China Railway Construction said in the statement. The takeover is also subject to government approval in China and Canada, it said.

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