Minmetals and Oz Minerals table revised deal

China Minmetals Non-ferrous Metals Company yesterday tabled a revised deal for Oz Minerals, proposing to buy specified assets for $1.2 billion, down from the $1.7 billion that it originally offered for the entire company.

The revision was forced on the firms after the Australian government last week rejected their February proposal on grounds of national security. The original deal had Minmetals, a state-owned enterprise and China's largest importer of copper, buying 100% of Oz Minerals. The Australian company had agreed to sell some specific assets to other parties before closing the deal with Minmetals, but the Prominent Hill mine was not on the list of disposals, and it is this asset that the Australian government is sensitive about. Prominent Hill is located near an Australian defence testing facility.

The revised deal will see Minmetals buy defined Oz Minerals assets, including Sepon, Golden Grove, Century, Rosebery, Avebury, Dugald River, High Lake, Izok Lake and others on a "cash free, debt free" basis for $1.2 billion. Oz Minerals will retain the strategically sensitive Prominent Hill mine, the Martabe mine, specific assets in Cambodia and Thailand and its equity investments.

"This structure allows Oz Minerals' shareholders to retain full ownership of Prominent Hill," says Andrew Michelmore, managing director and CEO of Oz Minerals. "Shareholders will now be allowed to retain full exposure to the long-term growth profile of Prominent Hill."