Tuesday, 12 July 2011

VALE SA THE WORLD’S LARGEST IRON-ORE PRODUCER TERMINATES ITS PROPOSED ACQUISITION OF METOREX LIMITED, PAVING THE WAY FOR A RIVAL $1.36 BILLION BID FROM CHINA’S JINCHUAN GROUP

VALE SA THE WORLD’S LARGEST IRON-ORE PRODUCER SAYS IT HAS AGREED TO TERMINATE ITS PROPOSED ACQUISITION OF METOREX LIMITED, PAVING THE WAY FOR A RIVAL $1.36 BILLION BID FROM CHINA’S JINCHUAN GROUP COMPANY TO WIN CONTROL OF THE COPPER COMPANY.
THE RIO DE JANEIRO-BASED COMPANY SAID IN A STATEMENT HERE IT HAS NO INTENTION TO MATCH THE TERMS OF THE RECENTLY ANNOUNCED OFFER FOR METOREX.
THE COMPANY SAID IN THE STATEMENT YESTERDAY THAT THE DECISION IS CONSISTENT WITH VALE’S RIGOROUS DISCIPLINE IN CAPITAL ALLOCATION ADDING THAT IT HAS “SIGNIFICANT GROWTH OPPORTUNITIES.
THE BATTLE FOR METOREX’S COPPER AND COBALT MINES IN ZAMBIA AND THE DEMOCRATIC REPUBLIC OF CONGO PITTED VALE AGAINST CHINA’S BIGGEST NICKEL PRODUCER AS COMPANIES FROM THE LARGEST NATURAL- RESOURCE CONSUMERS SCOUR AFRICA FOR MINES.
VALE, SEEKING TO BOOST COPPER OUTPUT ALMOST FIVEFOLD TO 1 MILLION METRIC TONS IN 2015, HAD UNTIL FRIDAY TO COUNTER THE BID FOR METOREX, WHICH CONTROLS ALMOST 5 MILLION TONS OF AFRICAN COPPER RESOURCES AND PRODUCED 26,358 TONS IN THE SECOND HALF OF 2010.
JINCHUAN’S BID IS 21% HIGHER THAN VALE’S OFFER AND THE PURCHASE OF METOREX WOULD GIVE JINCHUAN CONTROL OF THE RUASHI OPEN-PIT MINE IN CONGO AND THE CHIBULUMA COPPER PROJECT IN ZAMBIA.
JINCHUAN LAST YEAR BOUGHT VANCOUVER-BASED CONTINENTAL MINERALS CORPORATION FOR $447 MILLION AND TORONTO-BASED NICKEL PRODUCER CROW FLIGHT MINERALS INCORPORATION FOR US$140 MILLION.
THIS YEAR, THE GANSU, CHINA-BASED COMPANY ACQUIRED 45% OF WESIZWE PLATINUM LIMITED, A SOUTH AFRICAN PLATINUM EXPLORER, WITH THE CHINA-AFRICA DEVELOPMENT FUND.
MINING TAKEOVERS ARE ACCELERATING AS COMPANIES SEEK TO REPLACE AGING DEPOSITS AND CHINA’S INDUSTRIAL GROWTH STOKES CONSUMPTION. ANNOUNCED DEALS ROSE 58PERCENT TO $18.6 BILLION IN THE FIRST QUARTER FROM A YEAR EARLIER, ACCORDING TO BLOOMBERG DATA.
DEMAND IN CHINA FOR COPPER USED IN CONSTRUCTION AND APPLIANCES PUSHED THE PRICE OF THE METAL TO A RECORD $10,190 A POUND IN FEBRUARY THIS YEAR

published augustine

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