The other day i made reference to having read press which...

The other day i made reference to having read press which covered the details of why Hunan withdrew from the deal with THR - for your information guys as i have not seen it posted or discussed on this forum yet, here is the article.



HONG KONG, April 30 (Reuters) - Hunan Nonferrous Metals Co.
Ltd. <2626.HK>, China's largest zinc producer by output, cited
expected poor returns at a tungsten-molybdenum project in
Australia as the reason for its withdrawal from the development.
"It is about investment returns. The returns may not meet our
expectations," Chen Zhixin, deputy general manager and financial
controller of Hong Kong-listed Hunan Nonferrous, told Reuters.
"Overseas projects usually require about 25 percent," he said
of investment returns.
Australian metal firm Thor Mining Plc said last
Thursday that Hunan Nonferrous Metals Holdings Group Co. Ltd.
would not participate in the development of the Molyhil
Tungsten-Molybdenum project.
The parent of Hunan Nonferrous signed a deal in March with
the Australian metal firm to develop the proj ect.
Its Hong Kong-listed arm was expected to take over the
project from its parent once the investment proceeded.
"We have given up the project. Its reserves are not rich," Li
Li, general manager of the Hong Kong-listed firm, said.
He said the parent had hired a few Chinese companies to
conduct feasibility studies of the tungsten-molybdenum project.
Neither Li nor Chen provided proven reserves of the project.
Li said the firm, also China's top antimony producer, would
continue to seek acquisitions of other overseas mining projects
on lead, zinc, tungsten, molybdenum and antimony.
Shares of Hunan Nonferrous had eased 0.84 percent by the
midsession on Monday to HK$4.75, compared with a 1 percent drop
in the benchmark Hang Seng Index <.HSI> index <.HSI>.
They have lost abou t 3 percent since its forecast-lagging
2006 earnings were announced early last week.
Hunan Nonferrous' joint venture with Australian firm Compass
Resources would start operations in October this year,
Chen said in Hong Kong last week.
The project is designed to produce 10,000 tonnes of copper,
1,000 tonnes of cobalt and 750 tonnes of nickel a year.
Locally, the firm last week signed a contract to buy 98.33
percent of Hengyang Yuanjing Tungsten, which controls reserves of
about 300,000 tonnes of tungsten. The acquired firm is based in
southern Hunan province, where the buyer is located.
(Additional reporting by Alison Leung)
((Editing by Anne Marie Roantree; [email protected]; Reuters
Messaging: [email protected]; +852 2 843 6933, fax
+852 2845 0636))


Keywords: HUNANNONFERROUS AUSTRALIA


Monday 30 April 2007 15:41:51 AEST