Domestic

Minmetals keen on Anglo's zinc assets

By Zhang Qi (China Daily)
Updated: 2009-11-14 10:07

Several domestic metal firms including China Minmetals Corp are in the fray to acquire Anglo American's divested zinc assets, according to sources familiar with the matter.

Minmetals, Shenzhen-based Zhongjin Lingnan Nonfemet Co Ltd and Canadian mining company Teck Resources, in which Chinese sovereign wealth fund China Investment Corp owns a 17-percent stake, are in talks for the zinc assets to help secure supplies of resources, the source said.

"After Minmetals' takeover of Oz Minerals, its zinc business has started to grow. Seeking other zinc projects to meet its growing demand is in line with the company's business strategy," the source said. Zinc is widely used in die-casting and battery manufacturing.

Minmetals paid $1.4 billion for the acquisition of Oz Minerals including the Rosebery zinc mines in Australia.

A source from China Minmetals who declined to be named admitted that the company was keen on acquiring Anglo American's zinc assets, but refused to divulge any further details on grounds of confidentiality.

Anglo American said last month it was trimming part of its management and also selling non-core assets to cut costs. The assets included Scaw Metals, Copebras, Catalao and the group's portfolio of zinc assets. Together with the Tarmac unit, which has previously been identified as non-core, these assets accounted for nearly 11 percent of the group revenue in 2008.

Its zinc assets include the 100-percent-owned Skorpion mine in Namibia and Lisheen mine in Ireland, the 74-percent-owned Black Mountain mine and Gamsberg Project in South Africa. Anglo American's zinc businesses produced 340,500 tons of zinc and generated revenue of $209 million last year.

The 21st Century Business Herald said Anglo American held talks with Chinalco, the country's largest producer of aluminum, and Baosteel, the country's largest steel mill, over the Scaw Metals unit.