Chinese state-owned metals group Minmetals is keen to use its $1.7 billion acquisition of debt-crippled Australian miner Oz Minerals Ltd (OZL.AX) to buy more distressed firms, Oz Managing Director Andrew Michelmore said on Sunday.
They (Minmetals) want this as their offshore vehicle to grow their base metals business, Michelmore said in an Australian Broadcasting Corp television interview.
They are going to see this as a platform to really grow their business, he said.
Beijing is encouraging a drive for acquisitions in Australia by its government-backed entities during a low-point in the commodities cycle, a strategy raising concerns among Australian unions and some politicians. [ID:nSP413023]
Michelmore said Minmetals at first was looking only to buy some of Oz Minerals mines, dotted across the Australian outback and Southeast Asia before deciding last week to launch a cash offer for the entire company.
As they (Minmetals) did more and more due diligence, they said no, actually we want the lot, Michelmore said.
Oz Minerals board has unanimously backed the offer in the absence of a better offer.
Flush with state funds, China has emerged as a white knight for Australia's struggling mining firms hit hard by the global collapse in commodities markets, culminating this month with an offer by state-owned Chinalco to invest $19.5 billion in Rio Tinto Ltd/Plc(RIO.AX)(RIO.L). [ID:nSYD423671]
Australian two biggest mining unions, the Australian Workers Union and the Construction Forestry Mining Energy Union are demanding Australia's prime minister, Kevin Rudd, monitor Chinese investments in the country's mining industry for signs of market manipulation. (Reporting by James Regan; Editing by Anshuman Daga)
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