China Nonferrous Metal To Increase Stake In Australia's Terramin

China Nonferrous Metal To Increase Stake In Australia's Terramin.

SHANGHAI (Dow Jones)--China Nonferrous Metal Industry's Foreign Engineering & Construction Co. (000758.SZ) said Monday it plans to invest CNY32.35 million ($5.03 million) to increase its stake in Australian zinc and lead miner Terramin Australia Ltd. (TZN.AU). The Chinese company said its purchase of 12.3 million shares at A$0.37 each, or 32% premium to Terramin's closing price Friday of A$0.28, would raise its stake to 19.86% from 14.38% currently, further consolidating its position as the miner's biggest shareholder.

China Nonferrous Metal's Shenzhen-listed A shares ended midday 1.2% higher to CNY30.83, outpacing the Shenzhen Composite Index, which rose 0.4% at 1183.25.

The 33%-owned unit of state-owned mining group China Nonferrous Metal Mining (Group) Co. said the deal would boost its zinc and lead reserves.

Currently, Terramin has ore reserves of 1.69 million metric tons, located near Adelaide, South Australia, 164,700 tons of which are of zinc and lead metal content. Terramin started commercial operations in July 2008, and currently has an annual production capacity of 65,000 tons of zinc concentrate. Terramin's Tala Hamza lead-zinc deposit, which is based in Algeria, has ore reserves of 68.8 million tons, 3.82 million tons of which are of zinc and lead metal content. It is expected to receive a mining exploration certificate this year.

The stake buy is subject to the approval of regulators in China and Australia, the Chinese company said.