Dec. 29 (Bloomberg) -- China Railway Construction Corp. and Tongling Nonferrous Metals Group Holdings Co. offered C$679 million ($651 million) for Canada’s Corriente Resources Inc. to gain copper resources in South America.
Corriente shareholders will receive C$8.60 per share in cash, China Railway said in a statement to the Hong Kong stock exchange yesterday. That’s 14 percent more than the last traded price of the Vancouver-based company.
China’s biggest railroad builder and Tongling, the nation’s second-largest copper producer, would gain mining rights to 17 deposits in southeast Ecuador. China has been scouring the globe for raw materials to sustain the world’s fastest-growing major economy, buying assets from iron-ore mines in Brazil to oil fields in Canada in the past year.
The acquisition “is in line with the long-term strategy of the company,” Beijing-based China Railway said in the statement. The company “has added development of mineral resources as one of its principal operations,” it said.
Corriente shares closed at C$7.55 on the Toronto stock exchange on Dec. 24 and have risen 102 percent in the past year. Canadian markets were closed for a holiday yesterday.
China Railway dropped 0.3 percent to HK$9.87 in Hong Kong trading before the announcement. The stock has fallen 14 percent in the past year. Tongling stock, which has more than tripled in the past 12 months, rose 2.7 percent on the Shenzhen stock exchange.
Mining Rights
Corriente’s main assets include mining rights in the Corriente Copper Belt in Ecuador, covering 17 deposits in the four main mining regions of Mirador, Mirador Norte, Panantza and San Carlos, China Railway said in the statement. Copper reserves in the four deposits are about 11.54 million tonnes, according to the statement.
Corriente said in May that it planned to spend $418 million on start-up of its Mirador mine and was in talks with a partner that might invest as much as $3 billion. Corriente’s reserves in Ecuador hold about $50 billion worth of copper based on prices of about $2 a pound, Ian Harris, the company’s country manager, said then.
Copper for March delivery was at $3.319 a pound at 9:32 a.m. local time on the New York Mercantile Exchange’s Comex unit. The metal has more than doubled this year as China’s imports reached records in the first half.
Corriente is also involved in exploration and development of gold, silver and molybdenum mines, according to China Railway’s statement.
Zijin Purchase
China’s currency regulator, which oversees the country’s $2.27 trillion of foreign-exchange reserves, said on Dec. 8 it will “actively support” companies investing overseas.
Zijin Mining Group Co., China’s third-largest copper producer on Dec. 1 agreed to pay $500 million for Indophil Resources NL to gain a stake in Southeast Asia’s largest untapped copper and gold deposit.
Overseas investment by Chinese companies surged 190 percent to $20.5 billion in the third quarter from a year earlier, according to the Ministry of Commerce.
China Railway and Tongling’s venture, CRCC-Tongguan Investment Co. will finance its offer for Corriente through bank loans and internal resources, the statement said.
The acquisition is subject to acceptance by shareholders representing a minimum of two-thirds of Corriente shares, China Railway said in the statement. The takeover is also subject to government approval in China and Canada, it said.
