China's Jinchuan trumps Vale's Metorex bid

Tue Jul 5, 2011

* Jinchuan tops Vale bid by 21 percent
* Brazil and China both hungry for African resources

JOHANNESBURG, July 5 (Reuters) - South African miner Metorex Ltd (MTXJ.J: Quote) said on Tuesday that it had received a firm offer from China's Jinchuan Group Ltd, trumping a bid by Brazilian giant Vale SA (VALE5.SA: Quote) and sending its share price higher.

Vale, the world's largest iron ore producer, seemed unlikely to be drawn into a bidding war after its chief financial officer earlier told Reuters in London that it would stick with its bid.

But Vale was given eight business days to match or better the Chinese offer for the South African-listed copper and cobalt miner.

Jinchuan, China's dominant nickel producer, added almost 22 percent to Vale's offer to one of 8.90 rand per share for a cash bid at current exchange rates of around $1.32 billion.

It is the latest chapter in the saga of the scramble for African resources by Chinese and Brazilian companies that are hungry for commodities to drive their own growth.

Metorex said it had not yet approved any agreement in relation to the Jinchuan offer but the companies said in a joint statement that it already had the firm backing of shareholders representing eight percent of Metorex voting rights.

Junchuan said in a separate statement that Metorex had deemed its offer superior.

Metorex is seen as a prized asset for a number of reasons. The winner will get exposure to exposure to copper and cobalt resources in Zambia and the Democratic Republic of Congo at a time when the outlook for both commodities is bullish.

Metorex's share price soared nearly seven percent on the news to 8.60 rand. (sourced Thomson Reuters)