Oz Minerals OKs Sale To Chinese Buyer

SYDNEY (AP) -- Australian miner Oz Minerals Ltd. said Thursday its shareholders have approved a plan to sell most of its assets to a Chinese buyer days after a Chinese plan to invest in Anglo-Australian miner Rio Tinto collapsed.

Mining companies have welcomed Chinese investors as falling commodity prices left some unable to pay their debts. But the deals have sparked debate over whether Chinese government companies should be allowed to control key mineral resources.

More than 90 percent of Oz Minerals shareholders who cast ballots were in favor of the 1.7 billion Australian dollar ($1.2 billion) sale to China Minmetals Nonferrous Metals Co., Oz Minerals said in a letter to the Australian Securities Exchange.

The deal includes mining operations in five areas that produce zinc, copper, lead and silver. Oz Minerals will retain its Prominent Hill gold and copper mine, which Minmetals was barred from purchasing because it lies in a military area.

Oz Minerals also has agreed to sell a gold and silver mine in Indonesia to another Chinese buyer, China Sci-Tech Holdings Ltd., for $211 million.

Chinese mineral and resource companies, flush with cash from supplying the country's economic boom, are buying mining and other assets abroad in hopes of profiting from future commodities demand.

China reacted angrily after Rio Tinto called off a deal last week for state-owned Aluminum Corp. of China, or Chinalco, to invest $19.5 billion in the company. The government's Xinhua News Agency accused Prime Minister Kevin Rudd's government of lacking sincerity.

Chinese foreign ministry spokesman Qin Gang said Thursday he could not comment on the Oz Minerals-Minmetals deal.

But he added, "I hope China and Australia can have equal and mutually beneficial cooperation to reach a win-win outcome."

Some Australian lawmakers object to allowing Chinese government companies to buy mining assets that they say are a cornerstone of Australia's economy.

The Oz Minerals deal is a lifeline for the indebted company, the world's second-largest zinc producer and Australia's third-largest miner.

Minmetals originally offered to buy all of Oz Minerals for 2.6 billion Australian dollars ($1.7 billion) but the Australian government rejected that on national security grounds because it included Prominent Hill.

More in Supply Chain