Metal Products News
- Jiangxi News
Date: 22-Mar-2007 Sources: (Shenzhen Daily)
JIANGXI Copper Co., China's biggest copper company, plans to raise as much as 4 billion yuan (US$517 million) selling yuan-denominated shares to buy assets and fund expansion.
The Hong Kong and Shanghai-listed copper producer will issue no more than 290 million shares, equal to 9.1 percent of enlarged share capital, to its parent and a group of institutional investors, the company said in a statement yesterday.
Demand for copper in China, the world's fastest-growing major economy, drove world prices to a record US$8,800 a ton May 11 last year. Jiangxi Copper plans to boost production capacity 60 percent by 2008 to meet soaring demand in the country, the world's biggest consumer of the metal used in pipes and wires.
'The stock gained mostly because copper prices have increased since the shares were suspended,'' said Chris Ding, a Beijing-based analyst at China International Capital Corp. 'The acquisitions themselves won't significantly boost earnings this year as mine output increases are marginal.''
The firm will pay 1.79 billion yuan in stock to State-owned parent Jiangxi Copper Corp. for the Chengmenshan mine and other assets and use cash from the sale to fund mine expansions. The parent owns 42 percent of Jiangxi Copper. The planned share sale is subject to government and shareholder approval.
About 80 percent of the amount Jiangxi Copper will pay its parent will be for the Chengmenshan copper mine. The mine in Jiujiang City in Jiangxi Province produced 6,188 tons of copper concentrates last year, adding to the 150,000 tons of mine output to Jiangxi Copper. Copper concentrate is used to make refined copper.
Net income at the Chengmenshan mine rose 16 percent to 96.7 million yuan last year, the company said. It also produced 30 kilograms of gold and 2,065 kilograms of silver in 2006.
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