China's top nickel refiner, the Jinchuan Group, has agreed to acquire an 11 percent stake in Australian miner Fox Resources Ltd for A$17.86 million (US$15.8 million).

 

It's the second overseas deal for state-owned Jinchuan this week after Canada's Tyler Resources Inc said Jinchuan agreed to buy it for C$214 million (US$213 million) to gain access to copper and zinc mines in Mexico.

 

Jinchuan will buy 18.8 million new shares for A$0.95 each, Fox said. The offer price represented a 14 percent premium on Fox's last quoted price before the announcement.

 

Fox has been supplying Jinchuan for more than three years with nickel and copper from its Pilbara operations in Western Australia.

 

Funds raised from the sale will be used to boost Fox's nickel operations.

 

Fox rose 1.8 percent to A$0.85 in Sydney trading yesterday after announcing the deal.

 

A Jinchuan representative will be invited to join Fox's board after the initial share issue, Fox said.

 

Jinchuan, based in western China's Gansu Province, is no stranger to Australia's mining industry. It holds stakes in several Aussie firms including Allegiance Mining and Metals X.

 

The latest deal is subject to approval by Gansu provincial government and China's central government, Fox said.

 

(Shanghai Daily January 10, 2008)