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Hong Kong (AFP) April 6, 2011 China's Minmetals Resources said Wednesday that it has received the greenlight from Sydney to launch a $6.5 billion takeover bid for Australian copper miner Equinox Minerals. Minmetals, China's largest metals trader, announced Monday that it would offer Can$6.3 billion for Equinox, in what would be the biggest Chinese takeover of an Australian resources firm. The plan, the latest move by a Chinese state-owned firm to get a foothold in Australia's mining sector, has sparked debate in Australia over whether to allow Chinese entities to increase their control over the country's resources. However, Minmetals in a statement to the Hong Kong stock exchange Wednesday said it had been informed by Australia's foreign investment regulator on Tuesday that the government did not object to the proposed takeover. "The Australian government has no objection to the proposed acquisition by the company of all the outstanding common shares in Equinox not already owned, directly or indirectly," the statement said. No offer has been formally made yet. Minmetals, which is 75 percent owned by state-controlled China Minmetals Corp and listed on Hong Kong stock exchange, currently owns 4.2 percent of Equinox. An attempted $19.5 billion investment in Rio Tinto by Aluminum Corp of China, or Chinalco, in 2009 fell apart amid bitter political opposition and accusations that the government was "selling Australia." The latest deal, which Minmetals expects to be completed by mid-2011, will give it access to Equinox's operations in Zambia and Saudi Arabia, and would create the 14th largest copper producer in the world. Equinox is listed in Canada and Australia and any deal will require the approval of regulators in both countries. The company has yet to comment on the proposal. If the deal goes ahead it will be twice the size of the $3.2 billion China's Yanzhou Coal paid for Australian miner Felix Resources in December 2009. Commodity prices have hit record highs, partly on heavy demand from China, sparking a series of mergers and acquisitions among mining companies. Copper is being propelled by tight global supplies of the industrial metal, which is used in plumbing, heating, electrical and telecommunications wiring.
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