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HNC pays $29.5m for Canadian antimony mine

(China Daily)
Updated: 2009-09-04 07:58

Hunan Nonferrous Metals Corp (HNC), the largest integral metals producer in China by production volume excluding aluminum, has agreed to acquire a 100 percent equity interest in Canada-based Beaver Brook Antimony Mine Inc (BBAM).

HNC, and its wholly owned subsidiary Gander Antimony Mine Ltd, will pay $29.5 million in cash from internal resources, the Hong Kong-listed company said in a statement late Wednesday.

"Most Chinese mining companies active in foreign takeovers are giant State-owned companies like Minmetals and Aluminum Corp of China. With this deal, we can see a trend that Chinese companies which used to operate mainly at provincial level have also speeded up overseas expansion," said Peng Bo, an analyst at Guosen Securities.

Acquiring BBAM will strengthen HNC's leading position in antimony exploration worldwide and increase its profitability in the long run, said Peng.

This takeover also reflects the overseas expansion strategy of HNC's major shareholder, China Minmetals Corp,which owns a 40 percent stake in HNC.

Minmetals, China's biggest metals trader, has signed contracts with partners to develop mines in Latin America and build up mills in Russia.

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HNC started its overseas expansion in 2006 when it cooperated with Australia-based Compass Resources NL to explore nonferrous metals mines in northern Australia.

Beaver Brook is the only operating antimony mine in North America, and is one of the world's largest antimony deposits outside China. The 550 tons per day underground mine boasts a high-grade antimony deposit with an expected 10-year mine life.

The Beaver Brook deposit was discovered in the 1980s, and was mined initially for several months in 1996 and 1997. It was reopened in 2008 and since then the mine has been ramping up towards commercial production, according to Energy Digital.

Hunan province in central China, with 9.3 percent of the world's antimony deposits, holds the largest antimony resources in China. HNC is the biggest antimony producer in China.

Antimony is a rare metal used extensively in the production of chemicals that are utilized to infuse plastics, textiles, rubber, and other materials with flame retardant.