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Minmetals looks for mergers

By Jiang Wei (China Daily)
Updated: 2009-02-13 08:28

China Minmetals Corp, the country's largest metal trader, will pursue the overseas mergers and acquisitions route this year to shore up growth, its President Zhou Zhongshu said yesterday.

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"New opportunities for overseas investment and acquisitions are emerging as many international mining companies hit by the financial crisis see their market values shrinking," he said.

Minmetals would pursue potential opportunities for overseas mergers and acquisitions in the ferrous and non-ferrous metal sectors and also develop its overseas geology exploration business.

At the same time, the company also intends to cooperate with government institutions in charge of land and resources for developing its ferrous metals exploration business at home.

The State-owned company is also strengthening risk management mechanisms as the financial crisis worsens, said Yan Keqing, director with the State-owned Assets Supervision and Administration Commission's board of supervisors to the company.

"The gloomier the market is, the more you should watch out for risks," he said, adding defaults and cheating may increase when some buyers face financial problems.

Minmetals should re-evaluate the credit of its overseas buyers, he said.

The company's sales revenue rose 28 percent year-on-year to $27.7 billion in 2008, while profit remained flat at 7.1 billion yuan ($1.04 billion). Revenue growth this year could run into some rough weather as prices of metals have been falling due to the economic slowdown, Zhou said.