Updates on Chinese ventures abroad: India, Australia, Indonesia, Eritrea

Updates on Chinese ventures abroad: India, Australia, Indonesia, Eritrea

India: Sichuan Aostar Aluminum Co. Ltd. has decided to transfer its 50 percent stake in a 1 million-ton alumina project in India to Ningxia Qingtongxia Aluminum Co. Ltd. The project is a 50-50 joint venture with Ashapura Minechem, India's leading miner, processor and bauxite exporter.

Australia: Chiping Xinfa Huayu Alumina Co Ltd., China's largest private alumina producer, has increased its stake in the Cape Alumina joint venture in Queensland, Australia, a Metallica Minerals Ltd. official told Interfax on May 30.

Xinfa's acquisition of an additional 7.5 percent stake from Anegada Metals Corporation Ltd. brings the company's total holdings in Cape Alumina to 17.5 percent. Cape Alumina is the joint venture company overseeing the Weipa Bauxite Project.

Yunnan Tin Group and an Australian prospecting company established an additional joint venture in March 2004. The Australian company changed its name to YTC Resources Ltd. in January this year to reflect the strategic alliance with Yunnan Tin Group, which acquired a 33 percent stake for AUD $2.67 million ($2.21 million) in March. YTC Resources, based in Australia's New South Wales, listed on the Australian Securities Exchange (ASX) on May 8.

Yunnan Tin Group is Asia's largest tin producer and also owns China's largest precious metals research and development center. In addition to YTC Resources, Yunnan Tin Group also holds controlling shares in Shenzhen-listed Yunnan Tin Co. Ltd. and Shanghai-listed Sino-Platinum Metals Co. Ltd.

The joint venture was previously co-funded by Metallica Minerals, Anegada Metals of the British Virgin lslands and Cyprus' Bondlines. Metallica Minerals previously held a 50 percent stake, with the remaining 2 companies holding a 25 percent stake.

Yunnan Tin Group, the world's largest tin producer, has also purchased a 5 percent stake in Metallica Minerals Ltd. in order to gain access to its nickel projects in Queensland, Australia, according to a Metallica announcement on June 1.

Tangshan Iron and Steel Group Co. Ltd. (Tanggang), China's second largest steelmaker, has entered into a long-term off-take agreement with Australian-based Fortescue Metals Group Ltd (FMG). Tanggang will purchase up to 20 million tons of iron ore from FMG per annum over a 10-year period commencing next year.

Baosteel, China's largest steel maker, entered into a similar agreement with FMG in March this year, and agreed to purchase up to 20 million tons of iron ore per annum over the next 10 years, as previously reported by Interfax.

FMG, an Australian Stock Exchange-listed company and the third largest iron ore supplier in Australia, owns proven iron ore reserves of 2.4 billion tons in a 3.8-square kilometer area in the Pilbara region of Western Australia. FMG has been developing the mining area since mid-2003 and plans to commence shipping iron ore in mid-May next year.

Indonesia: Shenzhen-listed Yunnan Tin Co. Ltd., China's top tin producer and exporter, announced on May 29 plans to develop base metals resources and construct a tin smelter in Indonesia in order to further secure overseas raw materials. The JV will be with KJP Investment Pte. Ltd., PT Karya Abadi Selars and PT Bangun Prima International. The company intends to purchase a 51 percent stake in the joint venture by investing $1.02 million to become the controlling shareholder.

The joint venture mining company will focus on the exploration of tin, copper, lead and nickel reserves in Indonesia.

Yunnan Tin also plans to jointly construct a tin smelter on Bangka Island, Indonesia, with a designed capacity of 10,000 tons of crude tin per annum. Yunnan Tin will invest $8.67 million in the joint venture (Nomico), with KJP Investment Pte. Ltd. and Pt Bangka Global Mandiri International to also become the largest shareholder with a 51 percent stake.

Eritrea: Shandong Guoda Gold Co. Ltd. recently entered into a framework agreement with the Eritrean government to develop mineral resources in the northeastern African country, a Guoda Gold official told Interfax on May 28.

The framework agreement stipulates that Guoda Gold will develop mineral resources, mainly gold, silver, copper, lead and zinc, while the Eritrean government will provide prospecting and mining information.

Mineral concentrates from any future Guoda Gold-Eritrea joint projects will supply raw materials to Guoda Gold's smelters, under an off-take agreement.

Zambia: Australia and London-listed Albidon Ltd. is continuing negotiations with Gansu Jinchuan Nickel Group, China's largest nickel smelter, regarding a joint nickel mining project in Zambia, an Albidon official told Interfax at the Nickel China 2007 forum, held in Shanghai on May 30.

"Albidon is currently negotiating with Jinchuan for the construction of a nickel smelting plant for the Munali project. We hope the negotiations will be successful and welcome Jinchuan to construct a smelting facility in Zambia," Ministry of Mines and Minerals Department of Zambia official, K. A. Liyungu, said.

[Source for the above information is Interfax China Metals (copyright) 1 June 2007]