Jinchuan to buy 70% stake in Tiomin's Kenya subsidiary

Sep. 3, 2009 (China Knowledge) - Jinchuan Group Ltd, the largest integrated non-ferrous metallurgical and chemical engineering enterprise in Asia, has signed an agreement with Tiomin Resources Inc, a Canadian mining firm, to buy a controlling stake in the latter's subsidiary in Kenya to expand into the titanium ore business.

According to the agreement, Jinchuan will buy a 70% stake in Tiomin Kenya Ltd, which owns 100% of the Kwale mineral sands project in Kenya.

Although no details on the value of the agreement were disclosed, Jinchuan will invest US$25 million in the development of Kwale mineral sands project, according to Tiomin's statement.

The deal is still subject to approval from its shareholders and regulators, said Tiomin CEO Robert Jackson, who predicted that the transaction will be completed within two months.

Cash generated by the Kwale project will initially be used to pay off project debt and will subsequently be distributed between the two firms.

Jinchuan's acquisition move is in accordance with the National Development and Reform Commission's suggestsion for Chinese enterprises to invest in overseas resources projects, especially those involving raw materials like copper, lead, zinc and cobalt concentrate.

Last month, Jinchuan announced its plan to buy 51% stake in Zambian nickel mine Munali, which was originally expected to output 10,000 tons of nickel annually.