A weekend of frantic negotiating has seen China Minmetals make an alternate offer to OZ Minerals after Federal Treasurer Wayne Swan last week vetoed the initial deal on the grounds of ‘national security’.
Swan blocked Minmetals’ $2.6 billion takeover bid last Friday because it included the Prominent Hill gold-copper project in South Australia’s Woomera Prohibited Area near the weapons testing range.
OZ will now be forced to consider a new deal excluding Prominent Hill in order to get itself out from $1.3 billion of debt and avoid being forced into administration.
The Melbourne-based miner has until March 31 to negotiate an extension on its debt.
The founder of Prominent Hill mine, Minotaur Exploration managing director Derek Carter, has called Swan’s decision to block the deal on grounds of national security “almost laughable.”
“The prohibited area covers around one-third of SA, and there’s a highway that goes up the centre of it and a railway,” he told The Australian.
“Any Chinese tourist could travel through there, take a tent with them and no one would know they were there.”
Despite the new offer from Minmetals, Prominent Hill, which is valued at between $1.2 and $2 billion, is OZ Minerals’ biggest asset and was considered the original deal’s main attraction.