MMG shopping for high grade ore. South America not looking...

MMG shopping for high grade ore. South America not looking good.

http://www.businessweek.com/news/2013-01-31/mmg-seeks-south-american-partners-as-it-forecasts-copper-advance

MMG Ltd. (1208), the Chinese miner that’s set aside $4 billion for acquisitions, is seeking stakes in South American copper producers as it forecasts the commodity’s price to climb this year.

The listed unit of China’s biggest metals trader is also looking to provide technical support or offer financing to producers, Chief Executive Officer Andrew Michelmore said yesterday, without disclosing any target. The Hong Kong-based company completed the acquisition of African copper producer Anvil Mining Ltd. for $1.3 billion in March last year.

“You’ve got to go where the minerals are and the minerals are there in Africa and South America,” he said in a phone interview from Melbourne. “One of the things we have to look at is what we can afford to do with our cash flow and how big a bite we can take.”

Copper is an attractive investment amid strong demand and supply constraints, which will ensure prices stay in a range of $7,500 to $8,500 a metric ton this year, Michelmore said. Inmet Mining Corp. (IMN) said Jan. 23 the sale of a stake in the Cobre Panama copper mine is among “many” options being considered by the Toronto-based company as it fends off a C$5.1 billion ($5.1 billion) hostile bid from First Quantum Minerals Ltd. (FM)

Michelmore declined to say if Cobre Panama is on his list. Finding a project with the right value is a challenge in South America because most mines have lower grades of ore, making it more costly to produce the metal, he said.

The company isn’t interested in projects with less than 50,000 tons of annual output, he said.