Today I approve the application by Minmetals Resources Limited (Minmetals Resources) to acquire Album Resources Private Limited (Album) and thereby its Australian mining assets that were in turn acquired in 2009 by China Minmetals Non-ferrous Metals Co Ltd (CMN) from the then financially troubled OZ Minerals Limited. This approval is subject to legally enforceable conditions.
The 2009 acquisition of the OZ Minerals assets was conditional on legally enforceable conditions and undertakings. As this transaction transfers these assets from one CMN subsidiary (Album Enterprises Limited) to another CMN subsidiary (All Glorious Limited), the 2009 conditions are also being transferred.
In summary, Minmetals Resources has undertaken to:
- Maintain the operation of the former OZ Minerals assets as a separate business with commercial objectives, including the maximisation of product prices;
- Maintain the operation of the mines using companies incorporated, headquartered and managed in Australia under a predominantly Australian management team;
- Sell all minerals produced on arms-length terms by a sales team headquartered in Australia, with reference to international observable benchmarks in line with market practice;
- Maintain or increase production and employment at the Century (Qld), Rosebery (Tas) and Golden Grove (Qld) mines, pursue growth of the Century and Rosebery mines, reopen the Avebury (Tas) mine and develop the Dugald River (Qld) mining project, subject to project feasibility and economic conditions;
- Comply with Australian industrial relations laws and honour employee commitments; and
- Maintain and where possible increase levels of Indigenous employment in its local operations and honour agreements with Indigenous Australian communities.
These undertakings will ensure that the Australian mines continue to be operated on a commercial basis. They demonstrate Minmetals Resources' commitment to the ongoing development and expansion of these mines providing jobs and benefits for regional Australia and the broader community. They also ensure consistency with Australia's national interest and are a condition of my approval under Section 25(1A) of the Foreign Acquisitions and Takeovers Act 1975. The conditions in full are at Attachment A.
ATTACHMENT A
MMR Undertakings to the Treasurer of the Commonwealth of Australia
For so long as Minmetals Resources Limited (MMR) owns (directly or indirectly) the MMG Australian Assets (as defined below), MMR undertakes to the Treasurer of the Commonwealth of Australia:
- to operate the MMG Australian Assets as a separate business unit according to commercial objectives, including the maximisation of product prices, margins and long-term profitability and the creation of long-term value to shareholders of MMR;
- to have the MMG Australian Assets owned by, and publicly acknowledged to be owned by, companies incorporated, headquartered and managed in Australia (Australian Operating Entities) under a predominantly Australian management team, with:
- the Chief Executive Officer and Chief Financial Officer of the Australian operations having their principal place of residence in Australia;
- the boards of the Australian Operating Entities each having at least two directors whose principal place of residence is in Australia;
- the majority of all regularly scheduled meetings of the boards of the Australian Operating Entities in any calendar year being held in Australia; and
- an annual financial report in accordance with section 295 of the Corporations Act 2001, together with an annual director's report that includes a review of the operations and principal activities of the group including product sales, employees, community relationships, environmental performance and any matter or circumstance that may significantly affect its operations, results or state of affairs in future years being lodged with the Australian Securities and Investments Commission and being made accessible to the Australian public on the Group's Australian website.
- that products produced by the MMG Australian Assets will be sold on an arms‑length basis by the Australian Group's sales team headquartered in Australia, with base and precious metals prices being determined by reference to international observable benchmarks (e.g. LME and COMEX) in line with market practice;
- to:
- continue to operate the Century, Rosebery and Golden Grove mines at current or increased production and employment levels;
- pursue the growth of the following projects:
- the Century mine in Queensland, by the continuation of exploration activities for ore and/or the conversion or later sale of the plant so that it can produce a phosphate concentrate;
- the Rosebery mine in Tasmania, which with further exploration and development work, could continue to operate well beyond current mine life or at levels beyond current production rates; and
- reopen Avebury (nickel) in Tasmania and develop Dugald River (zinc) in Queensland,
subject in each case to project feasibility and economic fundamentals permitting;
- to comply with Australian industrial relations laws and to honour employee entitlements; and
- to support Indigenous Australian communities, by honouring agreements with Indigenous Australians and maintaining and seeking to increase levels of Indigenous employment in its local operations.
For the purpose of the above undertakings, the MMG Australian Assets include:
- the Century zinc/lead/silver mine located in Queensland, Australia;
- the Golden Grove copper/zinc/lead/precious metals mine located in Western Australia, Australia;
- the Rosebery lead/zinc/copper/precious metal mine located in Tasmania, Australia;
- the Dugald River zinc project located in Queensland, Australia;
- the Avebury nickel project located in Tasmania, Australia; and
- the portfolio of exploration assets in Australia currently owned by the Australian subsidiaries of Album Resources Private Limited.