Sumitomo lets China Moly buy Rio's Northparkes copper stake
MELBOURNE (Reuters) - China Molybdenum (HKG:3993) has cleared a key hurdle to taking control of Rio Tinto Northparkes copper mine, with Japan's Sumitomo Metal Mining (TYO:5713) and Sumitomo Corp deciding not to match the Chinese miner's $820 million bid.
Rio Tinto (ASX:RIO)(LSE:RIO) agreed to sell its 80 percent stake in the Australian copper mine to China Molybdenum Luoyang Co Ltd in July, subject to Sumitomo Metal Mining Co Ltd and Sumitomo Corp, which own the remaining 20 percent, waiving their rights to match the bid.
"CMOC is pleased to announce that they look forward to closing the deal with Rio Tinto's subsidiary North Mining Limited and also to working with Sumitomo for the long-term benefit of both parties," China Molybdenum said in a statement emailed to Reuters on Tuesday.
Sumitomo Metal Mining President Yoshiaki Nakazato last week told Reuters the company was considering matching China Molybdenum's bid, adding there was no financial obstacle and it was an opportunity to boost its copper interests.
He also said Sumitomo had some concerns about taking on a partner at Northparkes that has never run a copper mine. China Molybdenum mainly produces molybdenum and tungsten.
The Japanese firm may be eyeing other opportunities, as major miners have put a range of assets on the block looking to cut costs and focus on their most lucrative operations to cope with weaker commodity prices.
Glencore Xstrata Plc (LSE:GLEN) is looking to sell its Las Bambas copper project in Peru by the end of this year and is also selling its stake in the Frieda River copper project in Papua New Guinea.
(Reporting by Sonali Paul; Editing by Stephen Coates)
