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Minmetals revises offer amid security concerns

China Minmetals Corp, which last week had its A$2.6-billion (US$1.8 billion) proposed takeover of OZ Minerals Ltd blocked by the Australian government on national security grounds, has submitted a revised bid to win approval.

The initial offer was rejected because OZ Minerals' prime Prominent Hill copper-gold mine is close to a weapons-testing range.

Under the fresh proposal, Minmetals will acquire all of OZ Minerals' assets except for the Prominent Hill mine in South Australia, the Martabe gold-silver project in Indonesia and its portfolio of listed assets, OZ Minerals said in a statement.

Chinese Foreign Ministry spokesman Qin Gang said yesterday that the Chinese government supports cooperation between Chinese and Australian companies and that the deal was a matter of cooperative intent between the two.

"The revised bid could enable Minmetals to gain approval," said a Shanghai-based senior industry source. "What Minmetals eagerly wants are copper and zinc, rather than gold, silver and uranium, so the revised bid is not bad for Minmetals."

OZ Minerals didn't give a value of the revised offer and a Beijing-based Minmetals spokesman said it was still being negotiated.

OZ Minerals said the revised offer would refinance its A$1.2 billion in debt that was due yesterday. It's seeking an extension to the repayment date and said it will make definitive announcements on refinancing negotiations and the new Minmetals proposal before the commencement of share trading today.

Meanwhile, Australia yesterday approved China's Hunan Valin Iron & Steel Group's A$1.3 billion investment in iron ore producer Fortescue Metals Group.

Treasurer Wayne Swan approved for Valin to take up to 17.55 percent in Fortescue, but he has yet to decide on Aluminum Corporation of China's US$19.5-billion investment in debt-laden Anglo-Australian mining giant Rio Tinto Group.


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