China Goes After Another African Copper Producer, Bids $1.3 B
In yet another buying spree, China is going after another African copper producing firm to acquire its abundant copper production.
Minmetals Resources Ltd. of China is poised to buy Anvil Mining of Congo for $1.31 billion to secure copper mine production output in Africa amid the recent fall of the commodity's prices in the world market.
In a statement, Minmetals, the Hong Kong-listed unit of state-owned China Minmetals Group, said the shareholders who owned 40.1 percent of Anvil Mining's stock backed the $C8-a-share proposal.
The bid price stands for a 39 percent premium over Thursday's closing price of Anvil's Toronto-listed shares.
"The Anvil board has unanimously determined that the offer is in the best interests of Anvil and the Anvil shareholders, and has recommended that Anvil shareholders accept the offer," Minmetals said in the statement.
Minmetals has yet to specifically identify how to fund the deal, but said it will scout for a financing facility as well as draw out on its own cash reserves. The Chinese firm does not own any common shares in Anvil.
As such, Minmetals' production of copper will dramatically increase after this acquisition.
In its second quarter production report issued last August, the company's MMG subsidiary said its production of copper concentrate and refined cathodes from its Sepon and Golden Grove mines in Laos and Australia, respectively, jumped 26 percent on the year to 24,122 tonnes.
Perth-based Anvil has three mines in the Democratic Republic of Congo. Its Kinsevere mine produced 16,538 metric tonnes of copper concentrates in 2010. It hopes to quadruple that figure through a $US400 million expansion.
The first phase of the Minmetals-Anvil expansion will start producing 60,000 tonnes of refined copper cathode this year. Still, that is less half the 146,690 tonnes of copper in concentrate produced by Lumwana in 2010.
China is the world's largest consumer of metals from copper to zinc. It is continuously searching for new channels supply that will support and bolster its industrial growth.
In March, Minmetals lost a $6.5 billion bid for Equinox Minerals, whose Lumwana copper mine lies across the border from Anvil's Kinsevere mine in Zambia. Both mines are located at the southern African copper belt extending across Zambia and the southeast Democratic Republic of Congo. Minmetals lost to Barrick Gold's $7.6 billion takeover bid of Equinox. Barrick Gold is a Toronto-listed mid-cap miner.