By Reuters, Toby Geoghegan
Allens has advised miner Rio Tinto on the $820 million sale of its 80 percent interest in Northparkes copper mine to China Molybdenum, which was advised by King & Wood Mallesons.
The Allens team was led by partner Richard Malcomson.
The purchase marks the biggest Chinese mining deal since ChinaGuangdong Nuclear Power Corp won control of the Husab uranium project in Namibia for about $2.3 billion last year, as Beijing turned cautious on approving overseas acquisitions after splashing billions of dollars on iron ore projects in Australia that have yet to generate returns.
The deal has been approved by Australia's foreign investment board, clearing a significant hurdle for the $820 million deal, but China Molybdenum's first foray into copper still needs the approval of Chinese authorities - the state planner and the commerce ministry - as well as its shareholders.
Northparkes is Australia's fourth-largest producing copper mine, based on 2012 production figures. It produced 53.8 thousand tonnes of contained copper in concentrate and 72.2 thousand ounces of contained gold in concentrate in 2012 at a net cash cost of approximately $1.07 per pound of copper.
The stake in Northparkes is one of several assets Rio has put up for sale as it aims to slash $5 billion in costs, pare debt and focus on its biggest, most profitable mines, following the listing of a minority stake in Coal & Allied in Australia and its majority hold in Iron Ore Company of Canada. The sale also follows the company's recently completed divestment of the Eagle nickel project in the United States.
China Molybdenum somewhat surprisingly beat OZ Minerals to the stake, although the Australian copper miner had been under pressure from shareholders not to overpay for Northparkes. Others who were in the running for the mine included China’s MMG, Nyrstar, Carlyle and KKR & Co, with most bids being under $800 million according to one banker involved.
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