By Michael Flaherty and Joseph Chaney
HONG KONG, Dec 9 (Reuters) - Oz Minerals, the world's second-largest zinc miner that is scrambling to refinance its debt, has attracted the interest of several Chinese metals companies, three sources with direct knowledge of the matter said.
Chinese oil and metals group CITIC Resources is among the companies exploring potential investments in the struggling Australian miner, two of the sources told Reuters.
Other Chinese suitors interested in Oz Minerals include China's state-owned metals companies Minmetals Corp and Chinalco, parent of Aluminum Corp of China (Chalco), said the sources, who did not want to be named because they were not allowed to speak publicly on the matter.
It is not clear what Oz Minerals assets, if any, a Chinese metals company would want to buy or invest in. Oz Minerals is also a miner of nickel, copper, gold and silver. Oz Minerals declined to comment.
Minmetals' public relations official, Gao Peijun, said he was unaware of any offer for Oz Minerals. Chinalco did not immediately return a call seeking comment.
'Citic Resources is not involved in the acquisition of Oz Minerals for the time being,' spokeswoman Mianco Wong said in an email. 'Citic Resources will keep review (of) its strategy according to the best interests of the shareholders.'
But sources close to both the Chinese companies and Oz Minerals say the Chinese have been pouring over the miner's books.
In fact, Chinese buyers have had their sights set on Oz Minerals for nearly a year, sources said, attracted to its metal resources at a time when China was scouring the region for deals to feed its construction boom.
Commodity prices have since plunged, giving Chinese buyers the chance to purchase assets for far cheaper than they could have a year ago.
Shenzhen Zhongjin Lingnan Nonfemet, China's third-largest zinc producer, on Tuesday offered A$45.5 million ($29.8 million) for control of Australian zinc miner Perilya Ltd , taking advantage of tumbling market values to secure supply.
Shares of Oz Minerals in early March hit nearly A$4 and have since dropped to A$0.55.
'In terms of its net debt, I don't think the situation is that bad,' said one source close to the company. 'But it's a timing thing on their repayment schedules. I think they can get a refinancing arrangement. There are some pretty good assets there.'
Oz Minerals Ltd, facing sharp falls in selling prices for its minerals, said on Dec. 1 it was given one month instead of two by its lenders to come up with a way to refinance $560 million in debt.
Oz Minerals has also been granted a month-long share trading suspension by regulators, fearing the negotiations will be hindered by volatility in its share price.
The extension to restructure its debt until Dec. 29 is a month short of the Jan. 31, 2009, extension it was seeking.
Oz Minerals last week said it will cut production at its giant Century zinc mine by 4 percent in 2009 and delay A$495 million in ($323 million) copper and gold mining projects, joining a growing number of miners forced to trim output as slowing global economies knock demand and prices.
($1=1.533 Australian Dollar)
(Additional reporting by James Regan in Sydney; Editing by Anne Marie Roantree and Lincoln Feast) Keywords: OZMINERALS/ (michael.flaherty@reuters.com; Reuters Messaging: michael.flaherty.reuters.com@reuters.net; +852 2843 6540, fax +852 2845 0636) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
HONG KONG, Dec 9 (Reuters) - Oz Minerals, the world's second-largest zinc miner that is scrambling to refinance its debt, has attracted the interest of several Chinese metals companies, three sources with direct knowledge of the matter said.
Chinese oil and metals group CITIC Resources is among the companies exploring potential investments in the struggling Australian miner, two of the sources told Reuters.
Other Chinese suitors interested in Oz Minerals include China's state-owned metals companies Minmetals Corp and Chinalco, parent of Aluminum Corp of China (Chalco), said the sources, who did not want to be named because they were not allowed to speak publicly on the matter.
It is not clear what Oz Minerals assets, if any, a Chinese metals company would want to buy or invest in. Oz Minerals is also a miner of nickel, copper, gold and silver. Oz Minerals declined to comment.
Minmetals' public relations official, Gao Peijun, said he was unaware of any offer for Oz Minerals. Chinalco did not immediately return a call seeking comment.
'Citic Resources is not involved in the acquisition of Oz Minerals for the time being,' spokeswoman Mianco Wong said in an email. 'Citic Resources will keep review (of) its strategy according to the best interests of the shareholders.'
But sources close to both the Chinese companies and Oz Minerals say the Chinese have been pouring over the miner's books.
In fact, Chinese buyers have had their sights set on Oz Minerals for nearly a year, sources said, attracted to its metal resources at a time when China was scouring the region for deals to feed its construction boom.
Commodity prices have since plunged, giving Chinese buyers the chance to purchase assets for far cheaper than they could have a year ago.
Shenzhen Zhongjin Lingnan Nonfemet, China's third-largest zinc producer, on Tuesday offered A$45.5 million ($29.8 million) for control of Australian zinc miner Perilya Ltd , taking advantage of tumbling market values to secure supply.
Shares of Oz Minerals in early March hit nearly A$4 and have since dropped to A$0.55.
'In terms of its net debt, I don't think the situation is that bad,' said one source close to the company. 'But it's a timing thing on their repayment schedules. I think they can get a refinancing arrangement. There are some pretty good assets there.'
Oz Minerals Ltd, facing sharp falls in selling prices for its minerals, said on Dec. 1 it was given one month instead of two by its lenders to come up with a way to refinance $560 million in debt.
Oz Minerals has also been granted a month-long share trading suspension by regulators, fearing the negotiations will be hindered by volatility in its share price.
The extension to restructure its debt until Dec. 29 is a month short of the Jan. 31, 2009, extension it was seeking.
Oz Minerals last week said it will cut production at its giant Century zinc mine by 4 percent in 2009 and delay A$495 million in ($323 million) copper and gold mining projects, joining a growing number of miners forced to trim output as slowing global economies knock demand and prices.
($1=1.533 Australian Dollar)
(Additional reporting by James Regan in Sydney; Editing by Anne Marie Roantree and Lincoln Feast) Keywords: OZMINERALS/ (michael.flaherty@reuters.com; Reuters Messaging: michael.flaherty.reuters.com@reuters.net; +852 2843 6540, fax +852 2845 0636) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.