Message Mar 16 Aoû 2011 18:08

Jinchuan Seeking to Use $1.36 Billion Target Metorex for Afr

Jinchuan Seeking to Use $1.36 Billion Target Metorex for African Expansion
QBy Carli Lourens - Aug 16, 2011 5:25 PM GMT+0200 .
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Business ExchangeBuzz up!DiggPrint Email ...Jinchuan Group Ltd., the second- largest cobalt producer and fourth-largest nickel company by capacity, may use a planned $1.36 billion takeover of Metorex Ltd. (MTX) as a platform to expand its African metals operations.

“Africa has been Jinchuan’s focus for overseas development and Metorex has a very good management team,” Vice President Zhang Sanlin said in a translated interview in Johannesburg today. “After this acquisition, Jinchuan would like to leverage Metorex to look at more opportunities in Africa as well.”

The bid for Metorex and its copper mines in the Democratic Republic of Congo follows Jinchuan’s acquisition of a stake in Johannesburg-based Wesizwe (WEZ) Platinum Ltd. this year as the Asian company seeks to become a multinational minerals producer. The corporation, based in the city of Jinchang, is already China’s largest producer of nickel, cobalt and platinum group metals.

Jinchuan is “confident” of succeeding with its bid, which topped Brazilian rival Vale SA (VALE3)’s $1.1 billion, and won support from major Metorex shareholders, Zhang said. It also got “very encouraging” feedback from authorities in Congo, where Metorex operates the Ruashi mine, Peter J. Deneen, senior vice president of Jinchuan Group International Resources Co., told Bloomberg.

“The mining industry has a very long value chain so it can become a very fundamental driver for local economic growth,” Zhang said. “We see significant economic growth and social development” in Africa. Shareholders vote on the bid Sept. 2.

Pretax Profit
Jinchuan will probably post sales of more than 100 billion yuan ($16 billion) this year, while total asset value is about 80 billion yuan, he said. Pretax profit is forecast to exceed 15 billion yuan, according to a company report handed to Bloomberg.

The company has 150,000 metric tons of nickel capacity a year, 600,000 tons of copper, 10,000 tons of cobalt and 10 tons of platinum group metals, according to Zhang.

Jinchuan owns Sino-Nickel Ltd. and part of Albidon Ltd. (ALB) in Australia, Songshang Mining Ltd. in Tanzania, Tyler Resources Ltd. in Canada, Hungary Jinchuan Mining Co., Jin-gang Mining Co. in Congo, and Jinsheng Mining Co. in Indonesia.

Among Jinchuan’s owners, the Gansu provincial government holds 69.57 percent of Jinchuan, while Baosteel Group Co. and Taiyuan Iron & Steel (Group) Co. each have 5.94 percent.

South Africa has the world’s largest platinum reserves and Zambia is the continent’s biggest copper producer.

http://www.bloomberg.com/news/2011-08-1 ... nsion.html
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