Broken Hill miner Perilya set for Chinese buyout

The owner of Broken Hill’s silver, lead and zinc mine is set to be purchased by its major Chinese shareholder in a deal worth $269.3 million.

China’s No. 3 zinc producer, Zhongjin Lingnan, already have a 53 per cent stake in the company and announced plans to buy the rest of the stock for 35 cents a share.

Perilya's managing director, Paul Arndt, said the deal was good news for the Broken Hill operation.

"From the perspective of the continuation of Perilya as a company, having 100 per cent support from a company such as Zhongjin is something that will provide a lot more surety for employees in terms of surety in terms of continuity of operations and will let us carry through with our plans without being constrained by capital," Arndt said.

Arndt said directors of the company would unanimously support the proposal in the absence of a superior offer and pending an independent report to determine if the deal is in the best interest of shareholders.

Zhongjin Lingnan first invested in Perilya in 2009 through a share placement and strategic alliance.

Earlier this year the miner sacked 17 workers at its Broken Hill mine, blaming touch economic conditions for the move.

Arndt said rising costs and falling commodity prices were forcing companies to do more with less in order to stay profitable.

Under the new deal, Arndt said he is confident Zhongjin Lingnan will fully support Perilya’s current operations and use their financial strength to underpin the company’s future investment and development plans.


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