Tibet Summit eyes miner acquisition through share swap
Shanghai. July 6. INTERFAX-CHINA - Shanghai Stock Exchange-listed Tibet Summit Industry Co. Ltd. (Tibet Summit) announced July 6 it will purchase lead and zinc mining firm Tazhong Mining Co. Ltd. (Tazhong Mining) through a share swap.
Tazhong Mining is a joint venture (JV) established by Tacheng Xinjiang International Resources Co. Ltd. (Tacheng International), which holds a 92 percent equity share, and China Global New Technology Co. Ltd. (Global Technology), which holds the remaining eight percent.
Tibet Summit, a lead and zinc smelter, will issue 315.3 million shares to Tacheng International and 24.7 million shares to Global Technology at a total consideration of RMB 4.5 billion ($695.36 million) in return for the mining asset.
Tazhong Mining is involved in the exploration, mining and trade of lead and zinc resources. It owns two mining rights and one exploration right to an area in western Tajikistan rich in high grade lead and zinc resources.
Tibet Summit is making the move to ensure a steady resource supply. Low supplies from upstream industries in 2010 saw Tibet Summit generate a loss of RMB 9.27 million ($1.43 million), according to the company's annual report released earlier this year.
Approximately 50 percent of China's lead and zinc smelters are currently facing a shortage of raw materials, forcing 27 companies to either suspend or cut production, Lei Xiaoli, a Shanghai Metals Market analyst, said at the 2011 Lead Zinc Summit in May.
-KHM
