Bloomberg reported that Jinchuan Group Limited, the second largest cobalt producer and fourth largest nickel company by capacity, may use a planned USD 1.36 billion takeover of Metorex Limited as a platform to expand its African metals operations.
Mr Zhang Sanlin VP of Jinchuan Group Limited said that "Africa has been Jinchuan's focus for overseas development and Metorex has a very good management team. After this acquisition, Jinchuan would like to leverage Metorex to look at more opportunities in Africa as well."
The bid for Metorex and its copper mines in the Democratic Republic of Congo follows Jinchuan's acquisition of a stake in Johannesburg based Wesizwe Platinum Limited in 2011 as the Asian company seeks to become a multinational minerals producer. The corporation, based in the city of Jinchang, is already China's largest producer of nickel, cobalt and platinum group metals.
Mr Zhang said that Jinchuan is confident of succeeding with its bid, which topped Brazilian rival Vale SA's USD 1.1 billion and won support from major Metorex shareholders.
Mr Peter J Deneen SVP of Jinchuan Group International Resources Co told Bloomberg that it also got very encouraging feedback from authorities in Congo, where Metorex operates the Ruashi mine.
Mr Zhang said that "The mining industry has a very long value chain so it can become a very fundamental driver for local economic growth. We see significant economic growth and social development in Africa."
According to a company report handed to Bloomberg, Jinchuan will probably post sales of more than CNY 100 billion in 2011, while total asset value is about CNY 80 billion. Pretax profit is forecast to exceed CNY 15 billion by the end of 2015. The company has 150,000 tonnes of nickel capacity a year, 600,000 tonnes of copper, 10,000 tonnes of cobalt and 10 tonnes of platinum group metals.
Jinchuan owns Sino Nickel Limited and part of Albidon Limited in Australia, Songshang Mining Limited in Tanzania, Tyler Resources Limited in Canada, Hungary Jinchuan Mining Co, Jin gang Mining Co in Congo and Jinsheng Mining Co in Indonesia.
Among Jinchuan' owners, the Gansu provincial government holds 69.57% of Jinchuan, while Baosteel Group Co and Taiyuan Iron & Steel (Group) Co each have 5.94%.
South Africa has the world's largest platinum reserves and Zambia is the continent's biggest copper producer.
(Sourced from www.bloomberg.net)
