It will be one to two years before China sees growth in demand for industrial metals despite a recent surge in prices, Wang Lixin, president of China Minmetals Non-ferrous Metals Co. Ltd said on Thursday.
Minmetals last week paid $1.4 billion for Australian mining assets it hopes to use as a launch pad to becoming a global supplier.
"We think the market will be flat in the next one to two years," Wang told reporters, dampening speculation that China was already leading a global recovery in the sector.
Minmetals launched its newly-formed MMG Ltd Australian arm in Melbourne on Thursday after buying assets from OZ Minerals Ltd including Century mine, the world's second-largest zinc mine, and a copper and gold business in Laos.
After operating at a loss, Century had turned cash positive thanks to a bump up in zinc prices, MMG's chief executive Andrew Michelmore said.
"In the last quarter, cash costs have been running around US$0.50 a pound," Michelmore said.
This compares with current equivalent selling prices of around A$0.71 a pound ($1,555 tonne) on the London Metal Exchange MZN3. The LME price in January was around $0.58 a pound ($1,280 a tonne).
Costs at the mine had ballooned as high as $0.69 a pound last year due to temporarily inflated mining expenditure tied to pre-stripping work, meaning it needed to move more earth to access ore.
Michelmore also said he saw a need to develop the company's nearby Dugald River zinc deposit, possibly in the next two-to three years to meet anticipated fresh demand from customers, mainly steel makers using the metal in galvanising.
Dugald has long been tipped as a replacement for the Century mine, which is scheduled to run dry in 2015.
Increasing metals prices -- copper is up 54 percent since January and nickel MNI3 is up 26 percent -- has led to some predicting demand, particularly from China, was rebounding.
But senior executives, including ones from industry majors BHP Billiton Ltd/Plc and Rio Tinto Ltd/Plc, warn the price surges were probably linked to stockpiling of metals in China rather than higher consumption.
Source: Reuters
Showing posts with label china minmetals. Show all posts
Showing posts with label china minmetals. Show all posts
Thursday, June 18, 2009
Monday, March 30, 2009
Minmetals Still In Discussions Over Oz Minerals
China's Minmetals was still in discussions with Australia's foreign investment regulators about buying debt-laden Oz Minerals, a spokesman said Monday, after a crucial part of the deal was vetoed by the government.
Treasurer Wayne Swan delivered a blow to China Minmetals Nonferrous Metals Co.'s proposed 2.6 billion Australian dollars ($1.7 billion) acquisition of the world's second-largest zinc producer when he said the state-owned company would not be allowed to buy Oz Minerals' Prominent Hill mine in the Woomera Prohibited Area, a military weapons testing range.
Fairfax Media newspapers reported Monday that Minmetals handed Oz Minerals a revised plan to buy most of the company but not the Prominent Hill gold and copper mine.
Oz Minerals, which sought the original Minmetals deal as a financial lifeline, did not respond to requests for comment Monday.
Minmetals spokesman in Australia, Ian Smith, also declined to comment on a revised plan but said Monday the company had been talking to the Foreign Investment Review Board and "that remains the case."
"Any offer put forward would be subject to FIRB considerations," Smith said.
Oz Minerals is Australia's third-largest mining company and the world's second-largest producer of zinc. It also produces copper, gold, lead and silver.
Source: Forbes/Associated Press
Treasurer Wayne Swan delivered a blow to China Minmetals Nonferrous Metals Co.'s proposed 2.6 billion Australian dollars ($1.7 billion) acquisition of the world's second-largest zinc producer when he said the state-owned company would not be allowed to buy Oz Minerals' Prominent Hill mine in the Woomera Prohibited Area, a military weapons testing range.
Fairfax Media newspapers reported Monday that Minmetals handed Oz Minerals a revised plan to buy most of the company but not the Prominent Hill gold and copper mine.
Oz Minerals, which sought the original Minmetals deal as a financial lifeline, did not respond to requests for comment Monday.
Minmetals spokesman in Australia, Ian Smith, also declined to comment on a revised plan but said Monday the company had been talking to the Foreign Investment Review Board and "that remains the case."
"Any offer put forward would be subject to FIRB considerations," Smith said.
Oz Minerals is Australia's third-largest mining company and the world's second-largest producer of zinc. It also produces copper, gold, lead and silver.
Source: Forbes/Associated Press
Sunday, March 29, 2009
Minmetals Makes Revised Offer For Oz
Sydney Morning Herals - China Minmetals put a proposal to OZ Minerals last night (Saturday) to acquire the bulk of the company, excluding the Prominent Hill copper-gold mine, in a move that could help save the miner from administration.
The Herald understands an offer was given to OZ after a weekend of frantic work by advisers from both sides who hoped to agree on a restructured deal after the Department of Defence's decision on Friday to bar the state-owned Chinese company from buying Prominent Hill.
"We would respond to any proposal we receive as soon as we evaluated it," OZ's executive manager of business support, Bruce Loveday, said last night.
OZ could resume trading as early as today if it agrees to the revised proposal from Minmetals, although it is understood no strict deadline had been set under which OZ needed to reply to the proposal lodged last night.
OZ has $1.3 billion of debt due to be repaid to its banking syndicate tomorrow, which has left it on the brink of administration. That means it is not in a particularly strong bargaining position over any offer from Minmetals.
The Prominent Hill copper-gold mine is OZ's most valuable asset. The Federal Government has allowed Minmetals to proceed with a bid for the remainder of the company.
A Deutsche Bank analyst, Paul Young, said he thought the banking syndicate would be willing to grant a 30-day extension on OZ's debt if the company could strike a revised deal with Minmetals by tomorrow.
He said OZ could be worth 50c a share, compared with the previous Minmetals offer of 82.5c a share, if Prominent Hill was excluded from the mix.
"If Minmetals decide to not revise their offer, then we see no alternative for OZ than administration," Mr Young said, adding he valued OZ at 33c a share under a liquidation scenario.
It could take months for OZ's banking syndicate to recover their funds if the company enters voluntary administration or receivership.
OZ and Minmetals spent the weekend working as fast as possible to come up with a new deal, which would include assets such as the Century zinc mine in Queensland, the Sepon copper-gold operation in Laos and the Rosebery zinc mine in Tasmania.
"There are a lot of issues to be sorted through," Mr Loveday said. "Tuesday is an interesting day for two reasons. That is when the trading halt is over and it is the bank day. It would be great to resolve it before then, but it is about doing the right deal, not just any deal."
OZ is unable to solicit offers for Prominent Hill under its existing deal with Minmetals, but it is open to considering approaches from potential acquirers such as BHP Billiton and Canadian miner Barrick Gold. BHP owns the Olympic Dam mine located about 150 kilometres from Prominent Hill and has already purchased copper concentrate from the OZ mine.
Mr Young said Prominent Hill could fetch $941 million, but that figure would include $600 million of associated project debt. The mine is not expected to be cash-flow positive until the June quarter.
The Herald understands an offer was given to OZ after a weekend of frantic work by advisers from both sides who hoped to agree on a restructured deal after the Department of Defence's decision on Friday to bar the state-owned Chinese company from buying Prominent Hill.
"We would respond to any proposal we receive as soon as we evaluated it," OZ's executive manager of business support, Bruce Loveday, said last night.
OZ could resume trading as early as today if it agrees to the revised proposal from Minmetals, although it is understood no strict deadline had been set under which OZ needed to reply to the proposal lodged last night.
OZ has $1.3 billion of debt due to be repaid to its banking syndicate tomorrow, which has left it on the brink of administration. That means it is not in a particularly strong bargaining position over any offer from Minmetals.
The Prominent Hill copper-gold mine is OZ's most valuable asset. The Federal Government has allowed Minmetals to proceed with a bid for the remainder of the company.
A Deutsche Bank analyst, Paul Young, said he thought the banking syndicate would be willing to grant a 30-day extension on OZ's debt if the company could strike a revised deal with Minmetals by tomorrow.
He said OZ could be worth 50c a share, compared with the previous Minmetals offer of 82.5c a share, if Prominent Hill was excluded from the mix.
"If Minmetals decide to not revise their offer, then we see no alternative for OZ than administration," Mr Young said, adding he valued OZ at 33c a share under a liquidation scenario.
It could take months for OZ's banking syndicate to recover their funds if the company enters voluntary administration or receivership.
OZ and Minmetals spent the weekend working as fast as possible to come up with a new deal, which would include assets such as the Century zinc mine in Queensland, the Sepon copper-gold operation in Laos and the Rosebery zinc mine in Tasmania.
"There are a lot of issues to be sorted through," Mr Loveday said. "Tuesday is an interesting day for two reasons. That is when the trading halt is over and it is the bank day. It would be great to resolve it before then, but it is about doing the right deal, not just any deal."
OZ is unable to solicit offers for Prominent Hill under its existing deal with Minmetals, but it is open to considering approaches from potential acquirers such as BHP Billiton and Canadian miner Barrick Gold. BHP owns the Olympic Dam mine located about 150 kilometres from Prominent Hill and has already purchased copper concentrate from the OZ mine.
Mr Young said Prominent Hill could fetch $941 million, but that figure would include $600 million of associated project debt. The mine is not expected to be cash-flow positive until the June quarter.
Tuesday, February 24, 2009
Minmetals Closer To Securing Oz Minerals
The state-owned Chinese company Minmetals has confirmed its due diligence in Oz Minerals, the first of two conditions to be satisfied before its $2.6 billion takeover can continue. The second condition - an agreement with Oz's banks extending a $1.1 billion debt facility to 31 March - needs to be completed by the end of this week, although the inclusion of European banks is expected to delay confirmation of the extension until Monday.
Approval from the banks is expected to be a formality as Minmetals intends paying off all OZ's debt.
OZ and Minmetals also need to secure approval from both the Australian and Chinese governments and the all-clear from the Australian Department of Defence because the group's Prominent Hill project in South Australia is on the Woomera rocket range.
As part of its refinancing plans, OZ has said it is advanced in separate deals to sell its Martabe gold project in Indonesia and the Golden Grove base metals mine in Western Australia.
Rumours that a deal had been struck last week to sell Martabe to a syndicate led by Owen Hegarty have yet to be confirmed.
Source: Melbourne Age
Approval from the banks is expected to be a formality as Minmetals intends paying off all OZ's debt.
OZ and Minmetals also need to secure approval from both the Australian and Chinese governments and the all-clear from the Australian Department of Defence because the group's Prominent Hill project in South Australia is on the Woomera rocket range.
As part of its refinancing plans, OZ has said it is advanced in separate deals to sell its Martabe gold project in Indonesia and the Golden Grove base metals mine in Western Australia.
Rumours that a deal had been struck last week to sell Martabe to a syndicate led by Owen Hegarty have yet to be confirmed.
Source: Melbourne Age
Tuesday, January 13, 2009
China Minmetals To Acquire SA Chromite Miner
Reports from China suggest that the China Minmetals Corporation is planning to acquire 70% of the shares of Vizirama, a South African chromite mining company based in Townlands. Vizirama possesses the exploration rights for mineral resources in the region and the acquisition will enable Minmetals to secure the leading position in the first phrase of exploration.
The acquisition will be conducted by Minmetals' subsidiary, Minmetals Development Co Ltd with a total investment of several million USD. The National Development and Reform Commission has already granted the investment and the further approvals are needed from the Ministry of Commerce and the State Administration of Foreign Exchange.
China Minmetals Corporation has had a long-standing interest in South African mineral resources and has a number of investments in the region, including the USD 6.5 million acquisition of the Naboom ferrochrome mine in 2007, a three-year contract with Palabora Mining Company to purchase 2 million tons a year of iron ore and an office in South Africa to handle the export of chrome concentrate and manganese to China.
Source: Steel guru
The acquisition will be conducted by Minmetals' subsidiary, Minmetals Development Co Ltd with a total investment of several million USD. The National Development and Reform Commission has already granted the investment and the further approvals are needed from the Ministry of Commerce and the State Administration of Foreign Exchange.
China Minmetals Corporation has had a long-standing interest in South African mineral resources and has a number of investments in the region, including the USD 6.5 million acquisition of the Naboom ferrochrome mine in 2007, a three-year contract with Palabora Mining Company to purchase 2 million tons a year of iron ore and an office in South Africa to handle the export of chrome concentrate and manganese to China.
Source: Steel guru
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