Minmetals targets African copper with Equinox bid

Minmetals Resources (1208.HK) has bid US$6.2 billion, including net debt, for Australia’s Equinox Minerals (EQN.TSX) in what would be China’s largest ever takeover of a mining company, Bloomberg reported. Equinox closed at C$7.55 (US$7.83) on Tuesday, 7.9% above the bid of C$7, with analysts predicting a final offer of at least C$8 per share. The deal is conditional on Equinox dropping its bid for Canada-based Lundin Mining (LUN.TSX). If successful, the acquisition would give Minmetals, a unit of state-owned China Minmetals Group, access to a copper mine in Zambia. Chinese demand drove copper to record levels on the London Metals Exchange in February. UBS (UBS.NYSE, UBSN.SIX) forecasts that Africa will account for 9.8% of global copper output in 2011, with production likely to grow as much as 10% per year for the next 5-10 years. Andrew Michelmore, CEO of Minmetals, said earlier this week that the company had built up a 4.2% stake in Equinox during 2010.