China Minmetals Corp, the country's biggest metal trader, has acquired 51 per cent of Hunan Nonferrous Metals Holdings Group for 5.56 billion yuan (HK$6.31 billion), a major step in the mainland's plan to restructure the industry. With the deal, Minmetals will control 30 per cent of the world's tungsten reserves and 60 per cent of China's hard alloy market, since tungsten is used to make alloy, according to a report by First Shanghai Securities. The state-owned firm signed an agreement last Thursday to acquire 49 per cent of Hunan Nonferrous Group for 5.56 billion yuan from the Hunan provincial branch of the State-owned Assets Supervision and Administration Commission (Sasac), Minmetals said. Hunan Nonferrous Group is the majority shareholder of Hong Kong-listed Hunan Nonferrous Metals Corp. Minmetals signed another agreement yesterday to acquire 2 per cent of Hunan Nonferrous Group from the Hunan branch of Sasac in return for waiving the latter's debts, said Minmetals. This leaves Minmetals with 51 per cent of Hunan Nonferrous Group and Sasac with 49 per cent. At the same time, Minmetals and Hunan Nonferrous Group signed a strategic restructuring deal to 'upgrade the competitiveness' of China's nonferrous metal industry in the global market through consolidation. 'Within three to five years, the new Hunan Nonferrous Group will consolidate the tungsten, antimony, tin, rare earth, lead and zinc resources of Hunan, upgrade its industries and become a leading global player in tungsten, antimony, lead, zinc and rare earth, and a leading copper and aluminium player in China,' said Minmetals president Zhou Zhongshu. The accord is part of a plan announced by the Ministry of Industry and Information Technology to restructure and upgrade the nonferrous metal, iron, coal and building material sectors in the central region through mergers and acquisitions in 2010 and 2011. The ministry encouraged firms including Minmetals, Aluminum Corp of China, Jiangxi Copper, Tongling Nonferrous Metals, Hunan Nonferrous Group and Henan Yuguang Gold and Lead to spearhead the consolidation of nonferrous metal firms and the restructuring of nonferrous metal resources in the region. The Minmetals-Hunan Nonferrous Group deal is the first in a series of mergers and acquisitions to create three to five large nonferrous metal conglomerates in a plan to restructure and upgrade the industry that was approved by the State Council early this year. With revenue of 185.3 billion yuan last year, Minmetals is a Fortune Global 500 company. 'This will be an important merger and acquisition in China's nonferrous metal industry, which will create major changes in China's tungsten industry,' wrote John Lee in a First Shanghai report last week. In June, Minmetals acquired most of the assets of OZ Minerals for US$1.35 billion, the largest acquisition in Australia by a Chinese company. OZ Minerals is the world's second-largest zinc producer and also produces copper, gold, lead and silver. Hunan Nonferrous Corp's shares have been suspended since December 24. The firm posted a net loss of 7.4 million yuan on turnover of 15.6 billion yuan in 2008. Separately, Minmetals Land, the property subsidiary, yesterday announced it had obtained a seven billion yuan credit line from Agricultural Bank of China and Bank of Communications to finance real estate development projects.