[miningmx.com] — CHINESE resource major Jinchuan intends using Metorex as a strategic vehicle for further mining developments in Africa by the group.
That’s according to Jinchuan vice-president Zhang Sanlin who is in charge of the group’s business development and merger and acquisition activities.
Jinchuan has made a cash bid of 890c per Metorex share to take over the JSE-listed copper and cobalt producer, and shareholders will vote on the offer at a general meeting to be held on September 2.
Interviewed in Sandton on Tuesday, Zhang said Jinchuan had so far received irrevocable acceptances of its offer from shareholders representing 31% of the company.
He said “we are confident that the shareholders will vote favourably on our offer at the meeting on September 2.’
Jinchuan outbid Brazilian resource heavyweight Vale for control of Metorex after Vale made an initial offer for the company at 735c in mid-April.
Zhang said Jinchuan’s interest in Metorex had arisen through its long-term business relationship with the company, which had supplied cobalt to Jinchuan.
He said that acquiring Metorex as a copper and cobalt producer was “consistent with Jinchuan’s business strategy’ while Metorex owned an attractive mix of producing assets as well as pre-production and growth projects.
He played down the significance of the move into the Democratic Republic of Congo (DRC), stating Jinchuan assessed the merits of its projects on a “case by case’ basis although he said that investing in Africa was now “a strategic focus for Jinchuan’.
Zhang also highlighted the proven abilities of the Metorex management team and said Jinchuan was extremely keen to keep it in place. Also, Metorex after the acquisition would be a “very good platform’ on which the management could develop professionally.
“From the very early stages we made it clear to Metorex that we wanted to keep the key management executives and the core professional staff because they have shown a good track record,” Zhang said. “After the transaction Metorex will continue to be run as a stand-alone operation with its own board of directors and management.”p>
But Zhang declined to specify whether Jinchuan would keep present CEO Terence Goodlace in charge of Metorex. He said a decision on the CEO position would be made by the Metorex board after the acquisition had been completed.
Jinchuan controls South African platinum junior Wesizwe and during May it replaced former CEO Arthur Mashiatshidi with career Jinchuan executive Jianke Gao. Mashiatshidi remained on the Wesiwe board as a non-executive director.
Zhang said that Jinchuan was following different approaches to both companies with Wesizwe remaining separately listed while Metorex would become a wholly-owned subsidiary.
He added the two companies would stay separate.
Jinchuan is a diversified mining conglomerate and is the largest producer of nickel, cobalt and platinum group metals in China. It is also China’s third largest copper producer.
Jinchuan is headquartered in Jinchang City in Gansu Province and is controlled by the Gansu provincial government which owns 70% of the equity. Other shareholders include the China Development Bank (16.5%); Shanghai Baosteel (5.9%), Taiyuan Iron & Steel (5.9%) and Gansu Industrial Transportation and Investment Company (2%).
