Wednesday, June 1, 2005

China expands silver mining to Chile

by Brian Turner

China has expanded its raw materials access in the western hemisphere yet further with an agreement between state-owned mining group Minmetals and the world’s largest copper producer, Chile’s Corporación Nacional del Cobre de Chile (Codelco).

Minmetals will spend US$500 million in the first phase of a reported US$2 billion deal that will see Minmetals making supply deals and developing copper projects with Codelco.

This is not the first deal between Chinese and South American metals groups. China’s largest steel maker, Baosteel, has agreed to build a plant in Brazil in conjunction with Companhia Vale do Rio Doce that will produce over 4 million tonnes of steel each year.

The Minmetals/Codelco deal gives China access to more copper at a time when the Asian nation is looking to foreign sources more and more for its raw materials at the same time that it gives Codelco the financing to expand operations. Additionally, the deal gives Minmetals the option of acquiring a stake in one of Codelco’s copper mines in the future.

In addition to the deal in Chile, Minmetals is reported to be negotiating with Noranda, the Canadian base metals producer, to form a partnership that would give it access to even more metal supplies.

 

 

 

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