todays Sydney Morning Herald
ox the only likely aussie company.
we may see some movement today
ZINIFEX says it will be "armed and dangerous" on the acquisition trail after it banks an estimated $2.5 billion from spinning off its smelting division.
The zinc miner's chief development officer, Stewart Howe, yesterday told the Sydney Mining Club his company was hoping to find a suitable copper acquisition to give it some more immediate or at least near-term production.
"For significant growth, it will need to come through acquisitions," he said. "A lot of our focus is going to be on building the copper part."
At the release of its annual results in August, Zinifex revealed it had spent $215 million buying shares ahead of a planned takeover attempt, but the deal never eventuated and it decided to liquidate the holding. Zinifex was rumoured to be targeting Canadian copper miner Aur Resources, which accepted a $C4 billion ($4.5 billion) takeover bid from Teck Cominco, despite long-running speculation a tie-up between Zinifex and Oxiana would make sense.
Zinifex said it was targeting mid-tier copper assets that contained at least 1 million tonnes of metal for an annual production rate of 100,000 tonnes a year.
"They clearly will never get on the radar screens of Rio or BHP," Mr Howe said. "We think this is a niche with fewer competitors."
But apart from Oxiana, few Australian miners appear to meet Zinifex's size criteria.
Perth's Equinox Minerals is developing the $US715 million ($805 million) Lumwana copper project in Zambia, which will produce 170,000 tonnes of copper a year starting next year.
Zinifex's investor relations head, Martin McFarlane, said his company was willing to consider investing in Zambia, but the Democratic Republic of Congo - home to plenty of appropriately-sized projects - was considered a "no-go zone" at this time due to the high political risk.
Citigroup yesterday noted the search for producing assets was "a competitive quest in a cashed-up mining sector looking for growth". It noted Zinifex could sit on its cash and become a self-funding acquisition target for a more aggressive miner.
OXR
oxiana limited
