China’s largest metals trader yesterday signalled that it would pursue copper assets worldwide with a $6.5 billion lunge for Equinox Minerals in one of the country’s biggest international takeover bids.
The deal would give Minmetals Resources control of the Torontolisted Equinox’s copper mines in Zambia and Saudi Arabia. It also would propel the company into the world’s top 15 copper producers and position it for what is expected to be robust long-term demand from a Chinese market that already represents 40 per cent of global demand.
Analysts believe that those enticements are likely to appeal to other, heftier industry players such as Xstrata and Antofagasta also on the lookout for promising copper assets.
The deal may give the world a timely reminder of how serious China can be when it wants something: although Minmetals is worth only $2.5 billion, it appears to be backed by heavyweight Chinese financing, pockets with a depth that could scare off rival bids.
In a piece of timing roundly praised by some Equinox investors as neatly turning the “hunter to hunted”, Minmetal’s bid appears to scupper an offer that Equinox had launched for Canada’s Lundin Mining that had forced it into a potentially expensive, debt-heavy showdown with a rival buyer. Minmetal’s offer is conditional on Equinox abandoning that deal.