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GATA adherents seize MineWeb, proclaim market rigging by central banks
By Charlie Zhu
Reuters
Thursday, July 8, 2004
http://biz.yahoo.com/rc/040708/minerals_china_noranda_1.html
SINGAPORE -- State-owned trading house China
Minmetals Nonferrous Metals Co. is preparing a
multi-billion dollar bid for Canadian miner Noranda
Inc., challenging an offer by Brazil's CVRD, market
sources said on Thursday.
A third overseas company is also planning a bid
for Noranda, the world's third biggest zinc and ninth
biggest copper producer, said one source involved
in the bidding process.
The source, who spoke on condition of anonymity,
told Reuters that Minmetals had hired Citigroup
to advise on a bid for control of Noranda, which has
a market capitalisation of nearly $5 billion.
"A bid process is under way," the source said,
declining to identify the third bidder or the size
of the controlling stakes the companies were
seeking.
Brascan Inc., Noranda's controlling shareholder,
said in June it was reviewing options for selling its
42 percent stake, valued at around C$3 billion
(US$2.3 billion), as it regards its mining asset
as non-core.
Brascan is mainly engaged in property, power
generation, and asset management.
Companhia Vale do Rio Doce (CVRD) is seeking
a 52 percent stake in Noranda, including Brascan's
interest, in a part-cash proposal, an official with a
fund that co-owns CVRD said on Wednesday.
A senior Citigroup banker handling mergers and
acquisitions declined to confirm or deny the
Minmetals plan. A Citigroup spokesman in Hong
Kong was not available for comment on Thursday.
Market sources said Minmetals selected Citigroup
following a contest among several international
investment banks last week, including Goldman
Sachs and Merrill Lynch.
The first source said it was the first time that a
Chinese natural resources company had made a
bid to acquire a foreign listed company,
underscoring China's hunger for commodities from
metals to oil.
A senior Minmetals official in Beijing, who declined
to be identified, said the company was interested
in investing in overseas mining projects, but he was
not aware if it was seeking to buy Noranda.
Minmetals' overseas ambition is evident. In April, it
said it had acquired a 51 percent stake in
Texas-based Sherwin Alumina, aimed at easing a
shortage of alumina in China.
Noranda also produces aluminium and is the majority
shareholder in Falconbridge Ltd., the world's third
largest nickel producer.
China's huge appetite for base metals, to feed an
economy that grew 9.8 percent in the year through
the first quarter, has been the major factor driving
metals prices to multi-year highs.
China's copper demand is set to grow more than 10
percent this year to around 3.2 million or 3.3 million
tonnes, around a fifth of global consumption, industry
analysts said. Zinc consumption in 2004 is set to
rise 7 to 8 percent from two million tonnes last year.
Minmetals, along with other state-owned Chinese
enterprises such as oil giant CNOOC Ltd. and
appliance maker Haier Group, have been leading
Beijing's drive overseas as they seek to spend
dollars earned from years of trade surpluses.
Minmetals Nonferrous is controlled by giant China
Minmetals Corp., which is engaged in the production
and trade of metals, minerals and electrical products.
China Minmetals Corp., which holds stakes in more
than a dozen companies listed in mainland China or
Hong Kong and has nearly 50 subsidiaries abroad,
racked up revenues of $11.68 billion in 2003, China
Minmetals Corp said on its Web site
(www.minmetals.com.cn).
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