China scouting for bargain mining deals

Chinese mining firms are gearing up to take advantage of the global downturn and seek M&A mining deals at bargain prices next year, a top official at South Africa's Standard Bank said on Tuesday.

Standard Bank, which is 20 percent owned by the Industrial and Commercial Bank of China Ltd (ICBC), has been holding talks with Chinese mining firms, Thys Terblanche, head of mining and metals investment banking, told Reuters.

"We're spending a lot of time with ICBC and their clients talking about opportunities for them," he said in an interview on the sidelines of the Mines & Money conference in London.

"They are looking at 2009 and saying 'This is a time we see as a very big buying opportunity. We've got the backing from government, we've got the financial means'."

Chinese mining groups would keep a strong focus on Africa, but would also probably seek out possibilities in Peru, Chile, Brazil, Australia and Indonesia, he added.

The global credit crisis and economic downturn has hit mining especially hard, sending the UK mining index down 70 percent from a peak hit in May. Many smaller firms are struggling to survive, opening up a path for takeovers by rivals with cash.

The deals would likely be a mix of structures, with only a limited number of full takeovers, but would include taking strategic stakes, providing financing and technical capability and joint ventures at the exploration level, Terblanche said.

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