China taking over Canadian oilsand, copper miner
Wow! That’s the first after-effects of Harper’s maiden visit to China!
Canada OKs major PetroChina oil sands investment
(AFP) — Canada’s Industry Minister Tony Clement said he had approved a 1.7 billion dollar acquisition by PetroChina of two Athabasca Oil Sands Corporation projects in northeastern Alberta province.
The deal gives PetroChina International 60 percent control of the Athabasca’s MacKay and Dover oil sands deposits.
“I am satisfied that the investment is likely to be of net benefit to Canada,” Clement said in a statement.
The minister said the Chinese company made a commitment to contribute more than 250 million dollars to cover its share of developing the oil sand projects over the next three years, as well as boosting employment and managing a regional office in the area for a period of five years.
The oil sand deposits of MacKay and Dover are projected to yield five million barrels of oil, according to Athabasca.
The October 31 PetroChina-Athabasca agreement is one of the top oil sand deals reached in Canada since it slumped into economic recession in late 2008.
At an estimated 175 billion barrels, the oil sands in western Canada are the second largest oil reserve in the world behind Saudi Arabia, but they were long neglected, except by local companies, because of high extraction costs.
Since 2000, skyrocketing crude oil prices and improved extraction methods have made exploitation more economical, and have lured several multinational oil companies to mine the sands, but foreign investments remained cyclical.
To date, the United States remains the largest consumer of bitumen from the oil sands.
And copper too:
Tags: Canada-ChinaCorriente, Vancouver copper miner, accepts $679M takeover offer by Tongling, China Railway
(CP) — The friendly takeover of Corriente Resources Inc. (TSX:CTQ) by a Chinese consortium sent shares of the Canadian copper miner up more than 13 per cent in Tuesday trading on the TSX.
Corriente stock rose $1.01 to close at $8.56, a gain of 13.4 per cent in heavy trading of more than 12.6 million shares on Canada’s main stock market.
Corriente announced Monday afternoon it has agreed to a $679-million takeover by RCC-Tongguan, a venture jointly owned by China-based Tongling Nonferrous Metals Group Holdings Co. Ltd. and China Railway Construction Corp. Ltd.
Under the agreement, Tongling and China Railway will pay $8.60 in cash for each share of Corriente, a company which develops copper, gold, silver and molybdenum mines. The company’s main assets are mining rights in southeastern Ecuador’s Corriente copper belt.
The transaction continues the flood of deals made by China’s state-owned mining and oil companies, flush with cash from the Asian country’s economic boom. They are acquiring companies around the world to help supply the rapidly growing Chinese economy with primary metals, oil and gas and other resources.
Earlier this year, China Investment Corp. invested $1.7 billion for a 20 per cent stake of Vancouver-based zinc, copper and coal miner Teck Resources (TSX:TCK.B), Canada’s largest publicly traded mining company.
More recently, Athabasca Oil Sands Corp. announced a joint-venture agreement with PetroChina that would see the Chinese company acquire a 60 per cent interest in two oilsands properties in northern Alberta for $1.9 billion.
Chinese companies also own stakes or have financed other metals and energy projects in Canada.
The Corriente transaction and other deals involving Chinese companies could be reviewed by the Canadian government if they fall within guidelines under the Investment Canada Act.
That law requires a review any time a Canadian company with assets of more than $312 million is acquired. The legislation was amended last spring to include a national security test as well.
In the case of Corriente, the transaction will help the company finance develop of its South American metals projects.
‘We are pleased to have reached an agreement with CRCC-Tongguan, who is committed to bringing their vision of responsible mining development to Ecuador,” said Corriente chief executive Ken Shannon.
‘The Mirador and Panantza-San Carlos copper projects will require large scale capital investment by CRCC-Tongguan to unlock the infrastructure development, social benefits and jobs that will flow to the people of Ecuador.”
The offer, which values Corriente at about $679 million on a fully diluted basis, represents a 27 per cent premium to Corriente’s average trading price for the 30 trading days through Dec. 24.
The offer will be open for for at least 35 days and is subject to a number of conditions, including the acquisition of at least two thirds of the company’s shares.
All officers and directors of Corriente, who collectively hold 12 per cent of the company’s shares, have entered into lock-up agreements with the Chinese companies to sell their stakes. And if the friendly deal is derailed, Corriente has agreed to pay a termination fee of $20 million under certain circumstances.
Tongling is a huge state-owned mining conglomerate involved in copper mining and processing, smelting and refining.
China Railway Construction is one of China’s biggest companies and raised $5.4 billion in a March 2008 initial public offering in Hong Kong. The construction company is one of the biggest in the world, operating in some 60 countries and regions.
CRCC-Tongguan, incorporated in China on Dec. 10, is jointly owned by China Railway and Tongling to jointly develop their global mining businesses.
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So Harper’s visit to China actually made a difference… surprise, surprise.