Today I approve a revised application by China Minmetals Non-ferrous Metals Co Ltd to acquire certain mining assets of OZ Minerals Ltd, but not including the Prominent Hill mine, conditional on legally enforceable undertakings.
Minmetals will, in summary:
- Operate the acquired mines as a separate business with commercial objectives.
- Operate the mines using companies incorporated, headquartered and managed in Australia under a predominantly Australian management team.
- Price all off‑take on arms‑length terms by a sales team headquartered in Australia, with reference to international observable benchmarks and in line with market practice.
- Maintain or increase production and employment at Century, Rosebery and Golden Grove mines, pursue growth in Century and Rosebery mines, reopen Avebury mine and develop Dugald River, subject to economic conditions.
- Comply with Australian industrial relations laws and honour employee entitlements.
- Maintain and increase levels of Indigenous employment in its local operations and honour agreements with Indigenous Australian communities.
These undertakings, which are designed to protect around 2,000 Australian jobs, ensure consistency with Australia's national interest principles and are a condition of my approval under the Foreign Acquisitions and Takeovers Act 1975 (see Attachment).
Minmetals' revised proposal is for Golden Grove, Century, Rosebery, Avebury and Dugald River mining operations in Australia. These produce zinc, copper, lead, and silver, which are priced with reference to the London Metal Exchange. Currently, some 80 per cent of total production from these mines is subject to life of mine contracts.
On 27 March, I announced that an earlier takeover proposal by Minmetals for OZ Minerals that included Prominent Hill, which is located within the Woomera Prohibited Area, could not be approved on national security grounds.
OZ Minerals has advised that it intends to remain an ASX listed company and to continue operating and further developing the Prominent Hill mine.
23 April 2009
"China Minmetals Non-ferrous Metals Co Ltd undertakes:
- to operate the acquired OZM Assets as a separate business unit according to commercial objectives, including the maximisation of product prices and long-term profitability and value.
- to have the OZM Assets in Australia owned by and publicly acknowledged to be owned by companies incorporated, headquartered and managed in Australia under a predominantly Australian management team, with:
- the Chief Executive Officer and Chief Financial Officer of the Australian operations having their principal place of residence in Australia
- the Boards of those companies each having at least two directors whose principal place of residence is in Australia;
- the majority of all regularly scheduled board meetings of those companies in any calendar year being held in Australia; and
- an annual financial report in accordance with section 295 of the Corporations Act 2001, together with an annual director's report that includes a review of the operations and principal activities of the group including product sales, employees, community relationships, environmental performance and any matter or circumstance that may significantly affect its operations, results or state of affairs in future years being lodged with the Australian Securities and Investments Commission and being made accessible to the Australian public on the Group's Australian website.
- that products produced by OZM Assets in Australia will be sold on an arms‑length basis by the Australian Group's sales team headquartered in Australia, with base and precious metals prices being determined by reference to international observable benchmarks (e.g. LME and COMEX) in line with market practice.
subject in each case to project feasibility and economic fundamentals permitting.
- continue to operate the Century, Rosebery and Golden Grove mines at current or increased production and employment levels;
- pursue the growth of the following projects:
- the Century mine in Queensland, by the continuation of exploration activities for ore and/or the conversion or later sale of the plant so that it can produce a phosphate concentrate; and
- the Rosebery mine in Tasmania, which with further exploration and development work, could continue to operate well beyond current mine life or at levels beyond current production rates; and
- reopen Avebury (nickel) in Tasmania and develop Dugald River (zinc) in Queensland;
- to comply with Australian industrial relations laws and to honour employee entitlements.
- to support Indigenous Australian communities, by honouring agreements with Indigenous Australians and maintaining and increasing levels of Indigenous employment in its local operations."
This condition, imposed under Section 25(1A) of the Foreign Acquisitions and Takeovers Act 1975, is subject to any revocation or amendment by the Treasurer.