BEIJING (Commodity Online): In China's latest bid to acquire resource assets abroad, two Chinese firms have offered $650 million for Canadian miner Corriente Resources Ltd.
China Railway Construction Corp and Tongling Nonferrous Metals Group Holdings Co announced the all-cash $650 million offer this week.
Corriente develops copper, gold, silver and molybdenum mines and its main assets are mining rights in southeastern Ecuador's Corriente Copper Belt.
China's state-owned mining and oil companies, flush with cash from its economic boom, are spending billions of dollar to acquire resource assets abroad in hopes of profiting from future demand.
China Railway Construction is one of China's biggest companies and raised $5.4 billion in a March 2008 initial public offering in Hong Kong. Tongling Nonferrous Metals is best known in China as a major copper producer.
The acquisition price represents a 14% premium to Corriente's last traded share price of C$7.55 on Thursday.
Corriente's businesses include the exploration and development of copper, gold, silver and molybdenum mines, and its main assets include mining rights in four copper and copper-gold deposits in southeast Ecuador, including the Mirador copper-gold project. The Mirador project was advanced to the feasibility stage in April last year. The mine will produce around 30,000 tonnes of copper per day.
Ecuador's mining sector is small, but the Andean nation has abundant reserves of copper, gold and silver. However, international mining companies have been reluctant to invest because of an uncertain legal environment. In 2008, Ecuadorian lawmakers froze mining activity and revoked about 80% of mining concessions while suspending the remainder as the government drew up new mining laws.
The regulations were approved in November, and since then companies such as Corriente and Kinross Gold Corp have been allowed to restart operations.
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