Luke Forrestal 9 January 2012 Source: The Australian Financial Review Fairfax Media Management Pty Limited.
China's Minmetals Resources will decide this week whether to persevere with its $C1.3 billion ($1.2 billion) takeover bid for Anvil Mining as negotiations over the ownership of Anvil's assets continue with the government of the Democratic Republic of Congo.
Minmetals' $8-a-share cash offer for Anvil, made in October, is due to lapse on Wednesday.
The Chinese company is yet to secure any acceptances but has lock-up agreements with Anvil directors and its largest shareholder, commodities trader Trafigura Beheer.
Minmetals' undertaking that it will proceed with the bid only if it secures the consent of the DRC's state-owned mining company Gecamines on terms it considers satisfactory has deterred other shareholders from accepting.
In November, Anvil, which is listed in Canada and Australia, said Gecamines had advised that the takeover would result in "a review of the financial terms of the lease agreement" for the Kinsevere copper mine, Anvil's flagship asset.
The state-owned company also indicated that the terms of its joint venture on the Mutoshi exploration project with Anvil would need to be reviewed.
On Friday, a spokeswoman for Minmetals said negotiations with Gecamines were continuing and the company remained "committed to the takeover offer". She declined to say whether the offer would be extended for a second time.
Anvil owns 95 per cent of Kinsevere through a wholly owned Congolese subsidiary, which in turn holds a lease from Gecamines over the mining tenements. The other 5 per cent of the asset is owned by a private Congolese company.
Mutoshi is a 70-30 joint venture between Anvil and Gecamines. The two companies are in dispute over whether Anvil has breached its obligation by failing to submit a "complementary feasibility study".
If Minmetals were to withdraw its offer for Anvil, it would be its second aborted takeover bid for an African copper miner in 12 months.
In April, it conceded defeat in its quest to own Equinox Minerals when Barrick Gold trumped its $C6.3 billion offer for the company.
Minmetals' executive general manager of business development, Mike Nossal, played down concerns over the situation with Gecamines in late October.
He said the DRC government often sought discussions when new investors entered the country and he was "fairly confident" they would play out benignly, as they had in other transactions.
Last week, Canada's First Quantum Minerals took a big step towards closing a painful chapter of its history in the DRC when it agreed to sell its assets there.
In 2009, it was stripped of its Kolwezi copper-cobalt project after the DRC government alleged the company had failed to comply with the country's new mining code.
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