6 March 2008
Miners ink zinc, gold pact
In a continuation of the consolidation occurring in the global mining industry, Australian miner Oxiana Ltd. will swap stock worth $5.8 billion to pick up rival Zinifex Ltd.
The deal will create the second-largest producer of zinc in the world. The move will also give the companies more leverage for acquisitions and mine development to meet Chinese and Indian demand for zinc, copper, gold, silver, and other precious metals, officials said.
The combined company will have a market capitalization of about $11 billion, officials said in a joint statement.
“Both companies firmly believe in the continued strength of demand for base metals coming from the extraordinary economic growth from development in China, India, and rest of the developing world,” said Zinifex Chief Executive Andrew Michelmore, who will head the combined company.
The two companies are not major competitors in zinc and lead, where Zinifex dominates, or copper and gold, which comprises the bulk of Oxiana’s production.
The new company will look at growing by exploration and acquisition and will look at potential purchases in Australia, South America, Africa, and Southeast Asia, where Oxiana is already firmly established, Michelmore said.
The firms expect to close the deal by July.
For related information, go to www.isa.org/productivity.
"We're 77% ahead of our business last year. We knew six months ago that this recession was happening, and we planned. We...