MMG seeking M&A in copper, zinc, other commodities - CEO (updated)

Metallic Minerals

12/10/2017 05:26

* Competition for copper assets 'severe' - CEO Jerry Jiao 
    * May partner with others on acquisitions - Jiao 
 
 (Adds CEO comment, industry context) 
    By Sonali Paul 
    MELBOURNE, Oct 12 (Reuters) - MMG Ltd  1208.HK , the 
international mining unit of state-owned China Minmetals Corp, 
has become China's preferred developer of overseas projects and 
is looking at acquisitions beyond its core strengths of copper 
and zinc, MMG's chief executive said. 
    As well as actively looking for copper and zinc projects to 
develop, "We continue to assess other commodities," Jerry Jiao 
told reporters at a Melbourne Mining Club lunch. Jiao said that 
could include other materials needed for electric vehicles. 
    China's government is supporting moves overseas by 
state-owned industries with a keen focus on commodities in which 
China is short, said the CEO of MMG, headquartered in Melbourne. 
    "Minmetals has been selected as a pilot programme for SOE 
(state-owned enterprise) reform - the only one in the metals 
sector," he said. "This has now positioned MMG as a preferred 
vehicle for foreign direct investment into international 
resource investment in 'China-short' commodities." 
    Jiao said it is becoming more difficult to make 
acquisitions, as his firm is chasing the same copper assets that 
other miners, now cash-rich after fixing their balance sheets, 
want to snare.  
    "The competition is getting more severe. It's just not easy 
to do what we planned," he told reporters after speaking at the 
event in Melbourne.  
    As a result, MMG may look more towards partnering other 
companies on the assets it wants to acquire, rather than going 
for acquisitions paid fully in cash, he said. 
    Beijing is trying to streamline and modernise its bloated 
and debt-ridden state-owned sector and create conglomerates 
capable of competing globally. It has ordered all state-run 
enterprises to modernise their ownership structures and 
introduce private capital as part of a far-reaching reform 
programme for its debt-ravaged state sector.  urn:newsml:reuters.com:*:nL4N1M83KH 
    Minmetals' selection for the trial was partly due to MMG's 
successful development of the Las Bambas copper mine in Peru and 
its zinc mine, Dugald River, in northern Australia, Jiao said, a 
"demonstration that China can deliver and operate world scale 
international mining projects - and deliver value." 
    MMG expects to produce 65,000-72,000 tonnes of zinc and 
560,000-615,000 tonnes of copper this year, it said in August.  
It will release its third-quarter production report on Oct. 18. 
 urn:newsml:reuters.com:*:nL4N1L931H 
    The company posted a half-year profit of $17.8 million in 
August.  urn:newsml:reuters.com:*:nFWN1L80KB 
 
 (Reporting by Melanie Burton and Sonali Paul in MELBOURNE. 
Additional reporting by David Stanway in SHANGHAI; Editing by 
Neil Fullick and Kenneth Maxwell) 
 ((melanie.burton@thomsonreuters.com Twitter: @MelanieMetals; 
+613 9286 1421; Reuters Messaging: 
melanie.burton.thomsonreuters.com@reuters.net)) 
 
Keywords: MMGLTD PRESENTATION/