Minmetals Seeks Metal Assets in South America, Southern Africa

By Xiao Yu

March 12 (Bloomberg) -- China Minmetals Corp., buying OZ Minerals Ltd. for A$2.6 billion ($1.7 billion), is seeking metal assets in South America and southern Africa, taking advantage of seven-year low commodity prices to secure supplies.

China’s largest metals trader may also “do some domestic acquisitions” this year, President Zhou Zhongshu said today in Beijing. It is still waiting for approval from the Chinese government for its planned takeover of Australia’s OZ Minerals, he also said.

Chinese state-owned companies agreed to invest $22 billion in commodity producers last month, securing iron ore, zinc and copper mines. The global financial crisis has dried up funding options for indebted companies including OZ Minerals.

“We’re also looking at other areas such as in South America and southern Africa where we can purchase nonferrous metal assets,” Zhou said while attending Chinese People’s Political Consultative Conference.

State-owned Minmetals has applied for permission to buy Melbourne-based OZ Minerals through China’s National Development Reform Commission, the country’s top planner, Zhou said. It plans to use OZ Minerals as a base for its overseas business and will “inject assets” into the company should the takeover be successful, he said.

Minmetals will also need approval from the Australian government, which can block the deal on national interest ground.

OZ Minerals fell 0.8 percent to 60.5 Australian cents on the Australian exchange at 1:06 p.m. local time. Minmetals had offered 82.5 cents a share for the takeover.

To contact the reporter on this story: Xiao Yu in Beijing at yxiao@bloomberg.net;