OZ Minerals says China firm has raised asset offer

By AFP

July 15, 2010 Updated Jun 14, 2009 at 9:41 PM CDT

China's Minmetals has raised its offer for the majority of OZ Minerals' assets by 180 million US dollars, the Australian company said, as shareholders looked set to approve the deal.

Chairman Barry Cusack backed the new offer, now at 1.396 billion US dollars, saying it "will deliver considerable additional value to shareholders" ahead of the debt-laden iron ore miner's annual general meeting.

OZ is due to decide on the deal less than a week after mining giant Rio Tinto walked away from a massive cash injection from Chinalco, angering the state-owned Chinese company.

Cusack also warned shareholders against alternative refinancing proposals put forward over the past week, saying the Chinese deal offered certainty.

"Conversely, the board remains very concerned that if shareholders vote against the Minmetals transaction today, there is a material risk that OZ Minerals may not be successful in refinancing its debt, which could potentially lead to it being unable to continue as a going concern," Cusack said.

Early indications were that shareholders would strongly back the Minmetals deal, with 92 percent of proxy votes -- absentee votes cast by stockholders not at the meeting -- supporting the move.

Canberra approved Minmetals' 850 million US dollar offer after the Chinese firm adjusted it to exclude OZ's flagship Prominent Hill mine because it was located near a military rocket testing range in South Australia.

If the deal fails, it will be the second Chinese offer related to Australia's resources sector to have soured in less than a week, after Rio Tinto dumped the Chinalco tie-up on Friday.

Rio rejected Chinalco's 19.5 billion US dollar offer for an improved stake in the mining giant, saying improved commodity prices meant a rights issue and a joint venture with former rival BHP Billiton were more appealing.

OZ Minerals stocks were in a trading halt Thursday pending the shareholder vote.

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