Minmetals considers Galeno stake swap
China Minmetals Corp, the nation's largest metals trader, is considering injecting its 60 per cent stake in the Galeno copper project in Peru into its Hong Kong-listed overseas mining unit, Minmetals Resources.
The plan, if realised, will help Minmetals Resources reach its target of becoming one of the world's top three mid-tier resources companies and roughly quadruple its market capitalisation within five years.
'China Minmetals has shown its commitment to support Minmetals Resources' growth, and Minmetals Resources will review opportunities that are in line with its long-term strategy,' Minmetals Resources chairman Wang Lixin said.
Minmetals Resources was previously a metals trader and smelter. It transformed itself into an overseas mining projects firm late last year by acquiring an Australian-run diverse metals mining firm from China Minmetals for US$1.85 billion.
At the time, China Minmetals said it considered Minmetals Resources as its flagship operation for overseas mining, and would give it preferential rights to buy its overseas mining assets.
In 2008, China Minmetals bought 60 per cent of the Galeno project, while Jiangxi Copper, the largest producer of the metal on the mainland, bought 40 per cent.
Together they spent C$455 million (HK$3.5 billion).
The mine is estimated to have copper reserves of 3.3 million tonnes and gold reserves of 79 tonnes.
It was originally slated to start production next year, but a revision of its feasibility study reportedly changed that date to the end of 2014.
Shareholders yesterday approved Minmetals Resources' September 30 proposal to acquire Toronto and Sydney-listed Anvil Mining for C$1.3 billion. At C$8 a share, it was a 30 per cent premium to the average share price of the previous 20 trading days.
