Mainland metals firms bid for Peru company

PUBLISHED : Friday, 07 December, 2007, 12:00am
UPDATED : Friday, 07 December, 2007, 12:00am

Jiangxi Copper, the mainland's largest integrated copper producer, has teamed up with China Minmetals, to take over Canadian miner Northern Peru Copper (NOC) in a deal worth C$455 million (HK$3.5 billion).

The two state-owned companies are offering C$13.75 cash for every NOC share which was a 34 per cent premium to NOC's volume weighted average price for the 20 days up to Wednesday.

NOC said its board and NOC shareholders controlling a total of 42 per cent of the company supported the offer, and the transaction was expected to close early next year.

NOC's chairman, Ross Beaty, said Minmetals and Jiangxi Copper were committed to developing the Galeno project in northern Peru. He said the project's reserves included copper, gold and molybdenum ores.

The Galeno project could produce an estimated 144,000 tonnes of copper concentrate annually over its 20-year life, although a feasibility study was still in progress.

The statement did not specify how much of NOC each of the mainland companies planned to control if the bid succeeded.

Other mainland firms have also invested in Peru's mining sector recently.

In August, aluminium firm Chinalco completed a US$860 million takeover of Peru Copper, giving Chinalco total copper reserves of about 20 million tonnes.

The NOC deal is Jiangxi Copper's second overseas deal in a month.

Chance to shine

Minmetals and Jiangxi Copper will develop the Galeno project in Peru

The takeover of Canadian miner's Northern Peru Copper would cost the mainland giants, in HK$: $3.5b