Companies

Minmetals on the prowl for more overseas, domestic buys

By Zhang Qi and Hou Qingyang (China Daily)
Updated: 2010-02-05 10:25

Metals trader China Minmetals Corp yesterday said it expects better fortunes this year on the back of double-digit growth fueled by more overseas and domestic mergers and acquisitions (M&As).

Zhou Zhongshu, president of Minmetals, said revenue for this year may go up by 20 percent.

The company's revenue dipped 4 percent last year to 173 billion yuan from 181 billion yuan in 2008, as the global economic crisis dampened commodity prices.

Profit slumped nearly 50 percent in 2009 to 3.15 billion yuan.

"Minmetals will take advantage of the opportunities arising from the restructuring of State-owned enterprises (SOEs)," said Zhou.

The central government is encouraging M&As among SOEs to build larger and more competitive Chinese enterprises.

The State-owned Assets Supervision and Administration Commission announced in January that the number of China's central SOEs would be streamlined at 80 to 100 from the current 129 by the end of this year.

Zhou said Minmetals would also look to overseas acquisitions to help grow into a globally competitive mining group.

"The overseas subsidiary Minerals and Metals Group (MMG) will serve as an international investment platform," said Zhou. "We will continue monitoring mining assets and deals at low costs."

The company paid $1.39 billion for zinc producer OZ Minerals in June 2009 to expand its presence in Australia.

In spite of the revenue decline due to lower commodity prices, the company's assets grew 136 percent as it successfully acquired several domestic and overseas mining assets.

Minmetals holds a majority stake in Hunan Nonferrous Metals Holding Group after increasing its stake in the Hong Kong-listed miner to 51 percent.

The company also acquired two SOEs, Changsha Research Institute of Mining & Metallurgy (CRIMM) and Luzhong Metallurgy & Mining Group. In September, Minmetals took over five subsidiaries of the bankrupt Ferrochina Ltd.

Zhou also said the company would diversify into nonferrous metals resources.

"We aim to be the world's largest rare earth supplier, and a leading lead and zinc producer, as well as a global supplier of tungsten and antimony," he said.