Mining: Lynas, WPL, OZL, ILU

  Federal Opposition Leader, Malcolm Turnbull might have made a big song and dance Friday in opposing the & #36;US19.5 billion Chinalco-Rio Tinto deal, but the same day saw yet another Chinese move to bail out a struggling Australian miner slip past him and most politicians.Mr Turnbull and the federal opposition, including Queensland National Party Senator Barnaby Joyce have said a lot about the Chinalco-Rio proposal (and the Senator has also mentioned OZ Minerals).But it all seems so contrived.Friday saw China Non-Ferrous Metal Mining Co. agree to pay & #36;252 million in cash for a majority stake in Lynas Corp, a small rare earths miner (used in electronics and a host of other goods).The state-owned company will buy 700 million new shares at 36c each, 22% more that the last closing price.The shares bounced 50.8%, or 15c to 44.5c, giving the Chinese and existing holders a nice May Day present.The deal has to be approved by the federal government, and that might be a tiny concern.China is the dominant producer of rare earths (LCDs for computers and TVs use them, as do Ipods, etc). Rare earths are also used in compact fluorescent light bulbs, hybrid cars and wind turbines.The deal will secure the company a total of & #36;522 million in cash and loans to complete construction of plants in Australia and Malaysia to supply customers in North America, Japan and Europe.The Senate is to begin an inquiry into foreign investment rules, and Rio Tinto released its submission Friday to the inquiry which argued strongly in favour of the Chinalco deal.China Non-Ferrous will end up with 51.6% of Lynas should the transaction be approved. The Chinese company will have four directors appointed to the board of Lynas, which suspended worth on its Rare Earths project in February due to lack of funding. Lynas will have four directors and the chairman will have the casting vote.Lynas said in its statement & #160;that the deal & quot;shall enable the company to lift the suspension of the project and complete construction and commissioning & quot;. & quot;The business model remains unchanged with the Concentration Plant to be built at Mount Weld, Western Australia, and the Advanced Materials Plant to be built in Malaysia. Lynas' marketing strategy remains unchanged with a focus on Japan, North America and the European Union including fulfilling existing sales contracts, & quot; Lynas said in its statement. & quot;Mr Nicholas Curtis is to remain as Executive Chairman and the Lynas Board shall be expanded to eight Directors to include four Directors appointed by CNMC, with the Executive Chairman having a casting vote. & quot;That arrangement might be enough to get the deal approved.Since the federal opposition started complaining about this, Chinese companies have bought assets from OZ Minerals and taken a stake in Fortescue Metals.Other deals include the Sinosteel group's moves in the Midwest iron ore province of WA where it controls Midwest Corp and has a small stake in rival Murchison, with approval to go to 49.9%.The federal government also approved the move by Chinese metals group, Zhongjin to take a 50.1% stake in Perilya, the Broken Hill miner in return for & #36;45.5 million in cash.Mount Gibson and a couple of other smaller iron ore players and base metals groups have done deals with Chinese companies.But they apparently don't matter to the federal opposition.  

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