China buys Terramin equity

Terramin Australia will sell equity to one of China¡¯s largest resource firms, China Non-Ferrous Metals Industry (NFC).

Terramin will give the company a seat on their Board in exchange for funds.

The funds will help the company finance its proposed zinc and lead mine in Algeria.

 The $46 million sale must first be approved by Australia¡¯s foreign investment regulators, who are also reviewing a proposed $19.5 billion investment by China Aluminium Co in Rio Tinto amid some opposition in Australia to Chinese investment in domestic companies.

A feasibility study of the Algerian project will be completed this year, enabling Terramin to seek major funding from smelting firms and additional Chinese investors to underwrite capital costs estimated at under $290 million.

¡°The new strategic relationship will strengthen our working position with Algeria,¡± Terramin executive chairman Dr Kevin Moriarty told MINING DAILY.

¡°The Chinese will bring us deep pockets of financing as well as the experience we will need to work in Algeria.¡±

Terramin has also agreed to a five-year lead and Zinc concentrate supply pact with commodities trader Transamine for material from the Algerian mine, Talma Hamza, which could potentially yield a quarter of a million tonnes of metal annually.

According to Moriarty, the supply agreement covers 100,000 tonnes of zinc and 40,000 tonnes lead concentrates annually, starting once the mine is running in 2011.

¡°Both Transamine and NFC are promising to bring in financing via smelters and directly from China. The $46 million brings us some time,¡± he said.

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