Australia clears Zijin's Indophil acquisition
Zijin Mining Group says it has got the green light from the Foreign Investment Review Board of Australia (FIRB) to proceed with its acquisition of Indophil Resources, part-owner of Southeast Asia's largest gold and copper deposit.
The mainland miner struck a deal last November to acquire Sydney-listed Indophil for A$545 million (HK$3.89 billion).
Zijin obtained approval for the offer on Thursday, it said in a filing with the Hong Kong stock exchange yesterday.
'Where the mine is located plays a big factor [in the acceptance],' said Robin Tsui, an analyst at Taifook Securities. '[Indophil] is in Australia but the mine is in the Philippines. If the mine was in Australia, [the FIRB] may have been more conservative.'
Zijin is part of a wave of mainland firms that have set their sights on Australia's resource reserves amid Beijing's growing appetite for raw materials.
The FIRB took measures last year to slow the rate of inbound acquisitions from overseas companies in an effort to preserve the country's control over its commodities.
But Indophil's key holding is in the Philippine island of Mindanao. The Australian firm owns a 34.2 per cent operating interest in the undeveloped Tampakan copper and gold project. The project is expected to start production in 2016. The mine could yield an estimated 340,000 tonnes of copper in concentrates and 10.9 tonnes of gold per year over a 20-year service life, according to a Zijin report in December.
Mindanao, the second-largest island in the Philippines, made headlines in November after a group of political insurgents killed scores of people, prompting the government to declare a state of emergency.
'There is always risk in the mining field especially in the Philippines,' Tsui said. 'But with the expertise of Zijin and the Australian counterparts they should have a good handle on the security issues.'
Additional reporting by Howard Winn
