Compiled by Caijing staff

(Caijing.com.cn) State-owned China Nonferrous Metal Industry’s Foreign Engineering and Construction Co. (SZSE: 000758) said it agreed to buy 12.3 percent of base metals miner Terramin Australia Ltd., equivalent to 15.5 million new shares, at AU$ 0.65 per share, making it China’s latest resource acquisition in Australia.

The transaction comes after Australia rejected last week an AU$2.6 billion takeover of OZ Minerals by China Minmetals Group on national security grounds. Australian Treasurer Wayne Swan said on March 27 that the Prominent Hill copper-gold mine in South Australia, OZ Minerals’ leading asset, is within the Woomera Prohibited Area, a military reservation for weapons testing. The Sydney Morning Herald reported on March 30 that Minmetals has put together a revised proposal for OZ Minerals that excludes Prominent Hill.

The offer for Terramin is a 43 percent premium to the stock’s closing price of AU$ 0.455 on March 26, the Chinese company said in a statement filed with the Shenzhen Stock Exchange on March 30. The deal is subject to approval by the Foreign Investment Review Board of Australia, the Chinese government and Terramin shareholders. 

If approved, the purchase would give China Nonferrous a seat on the Australian company’s board, while giving Terramin access to financing from Chinese banks for its Tala Hamza zinc and lead mine in Algeria, expected to start production in 2011, Terramin said.

Australia is considering several major resource company acquisitions by Chinese companies, including Chinalco’s US$ 19.5 billion deal for Rio Tinto and Hunan Valin Iron & Steel’s AU$ 645 million stake purchase in Fortescue Metals Group. The decision to reject the OZ Minerals deal cast a cloud on the other Chinese deals, with the Australian government signaling that it may be willing to let OZ Minerals go into administration rather than risk a Chinese presence in Woomera. OZ Minerals has AU$ 1.1 billion in debt coming due on March 31, and it must negotiate an extension or find another buyer.     

Full Article in Chinese: http://www.caijing.com.cn/2009-03-30/110129730.html