Kazakh mining group ENRC, which has seen positive trends feed through into second-quarter trading, would likely reject any request for a board seat by rival Kazakhmys, which is due to become the biggest shareholder with a 22 percent stake.
Kazahkmys, which announced on Tuesday it would buy a further 7.7 percent stake in ENRC from the government, has not made such a request but had asked for board representation before, Chief Executive Johannes Sittard said on Wednesday.
The previous request was rejected before ENRC's listing in December because there was a conflict of interest, he told reporters after the company's annual general meeting.
I don't think there has been any change of position ... if there is a conflict of interest at 14 percent, it exists at 20 percent.
Kazakhmys said on Tuesday it would seek cooperation with ENRC, and Sittard said that would be considered. We cannot say generally ... it depends on the projects.
ENRC was not surprised by the government's sale of part of its ENRC stake to Kazakhmys, a move that analysts said made a merger between the two rivals more likely.
GOOD GOVERNMENT RELATIONSHIP
ENRC has always had a good relationship with the government, whose stake has shrunk to 11.7 percent, and its two board representatives have never interfered in operations, he added.
We have never felt any pressure, any push in any direction to make decisions, Sittard said.
ENRC said on March 12 it was considering a takeover of its rival, but said last month it would not make a formal bid when given a deadline to do so by regulators. Sittard declined to say whether the firm might revisit a bid following a six-month period during which a bid is banned under takeover rules.
Kazakhmys, the world's 10th biggest copper producer and with about half the market capitalisation of ENRC, said on Tuesday it had no plans at the moment to make a full bid for ENRC.
Eurasian Natural Resources Corp Plc said in an AGM statement that the second quarter was looking just as positive as the first three months.
Into the second quarter of 2008 the trends underlying trading this year have continued. Significant price increases will feed through to benefit ferroalloys and iron ore revenues, Chairman David Cooksey said in the statement.
Also helping would be a new revenue stream from the firm's aluminium smelter, which was expected to generate sales of about 100,000 tonnes this year, he added.
In a trading statement on May 14, ENRC said high commodity prices had boosted revenue in the first quarter, laying the foundation for an expected robust performance in the full year.
The world's biggest ferrochrome producer, ENRC said the strongest performances in terms of earnings before interest, tax, depreciation and amortisation during the first three months of the year were in the ferrochrome and iron ore divisions.
Overall production also rose, up 2.5 percent for total ferroalloys and 3 percent for high-carbon ferrochrome.
Prices were the main driver of the strong revenue growth, with ferroalloys prices soaring 91 percent, iron ore jumping 42 percent and thermal coal up more than over threefold.
Kazakhmys shares ended down 6.85 percent at 1,550 pence while ENRC shares, which have more than doubled so far this year, closed 2.8 percent weaker at 1,325 pence. (Reporting by Eric Onstad; editing by Elizabeth Fullerton and Quentin Bryar
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