minmetals look at more overseas buys after avm

Minmetals looks at more overseas buys

Thu, Sep 29 2011By Alison Leung and Polly Yam

HONG KONG | Fri Sep 30, 2011 7:52am EDT

HONG KONG (Reuters) - China's Minmetals Resources Ltd (1208.HK), which on Friday agreed to pay $1.28 billion for Africa-focused copper miner Anvil Mining (AVM.AX), will look at buying more overseas base metals mining assets, its chief financial officer said.

Acquisitions will be key to attaining the company's target of becoming the world's third-largest, mid-tier upstream base metal miner in three to five years, David Lamont told Reuters in a telephone interview.

Minmetals is offering C$8.00 ($7.75) per Anvil share (AVM.TO), and the bid will be funded with internal resources plus a loan from its state-owned major shareholder Minmetals group, which holds a 72 percent stake in Hong Kong-listed Minmetals Resources.

Shares of Anvil jumped about 32 percent in Sydney, and Minmetals ended down 0.7 percent in Hong Kong, beating a 2.3 percent drop in the blue chip Hang Seng Index markets/index?symbol=hk%21hsi">.HSI.

Minmetals aim to boost the size of mining assets by three to five times, Lamont said.

"In order to meet the target that we have, we will need to make further acquisitions. But I would say we will do that in a very disciplined manner," he said.

Minmetals bowed out of a bidding war to buy Canadian copper miner Equinox Minerals Ltd (EQN.TO) EQN.AX about five months ago after Barrick Gold Corp, the world's largest gold miner, topped it with a C$7.3 billion offer.

Beijing-backed Minmetals, whose overseas assets are mostly in Australia, had total assets of $3.7 billion at the end of June.

Minmetals is viewed by some investors as the vehicle to add base metal reserves to feed China's insatiable appetite for raw materials.

But the company said it would eye the international market and earmark only about 10-15 percent of its products for the domestic market.

"The majority of our products will not go to China," Lamont added.

If the latest deal is completed, the company will focus on how to expand production of Anvil's Kinsevere mine in Congo, which is expected to produce 60,000 tonnes of copper cathode per annum.

"Given that it is a new operation, we would need to give it some time to look at how could we improve that position," Lamont said.

The deal is subject to approvals by shareholders and Australia's Foreign Investment Review Board, which Lamont said would not be an issue.

In order to vote, Minmetals group will need to seek an approval from China's National Development and Reform Commission, he added. ($1 = 1.032 Canadian Dollars)

(Editing by Charlie Zhu, Anshuman Daga and Jane Baird)

http://www.reuters.com/article/2011/09/30/us-minmetals-loan-idUKTRE78T1MB20110930?type=companyNews