BEIJING—In a sign that China hasn’t lost its appetite for global iron ore assets despite an economic slowdown, state-controlled mining giant China Minmetals Corp. said Tuesday it is considering a bid for Rio Tinto RIO.LN +0.32% PLC’s $4 billion Canadian iron-ore operations.
Minmetals, one of Beijing’s favored vehicles for cross-border mining deals, is interested in the asset and is “watching” the deal’s development, Assistant President Wang Jionghui told The Wall Street Journal on the sidelines of an industry conference. A more active pursuit of a bid would “depend on various factors, such as partners,” he said.
“We have invested in the neighborhood before and we are familiar with the area,” Mr. Wang said. He was careful to characterize Minmetals’ interest as being merely preliminary so far, adding that Rio’s assets are only one of many the company is monitoring.
The Anglo-Australian miner declined to comment Tuesday on Minmetals’ disclosure and other aspects of the impending sale.
If it materializes, such a bid would add to a string of Chinese acquisitions of Canadian resources, the largest of which was Cnooc Ltd.’s $15.1 billion purchase 0883.HK +0.29% of oil and gas producer Nexen Inc., completed in February. The potential Minmetals deal would also add to a nearly a decade of Chinese acquisitions of mining assets in Canada, which is the seventh-largest supplier of iron ore to the world’s biggest steel factory. Iron ore is a crucial steelmaking ingredient.
A Minmetals bid may touch off a multi-corner fight for Rio’s stake in Canada’s largest producer of the steelmaking ingredient, which mostly makes pellets and concentrates. Commodities giant Glencore Xstrata PLC and private-equity firm Blackstone Group LP BX -0.48% are also circling Rio Tinto’s Canadian iron-ore assets, The Wall Street Journal reported earlier this month.
Minmetals is the first Chinese metals company to confirm its interest in the asset. Chinese steelmaking majors named by analysts as potential suitors have signaled they weren’t quite as prepared to pursue the stake. A spokesman for Baosteel Group Corp., China’s third-largest steelmaker by output, said the Shanghai-based mill “has taken no measures” toward acquiring any of Rio’s assets, while Wuhan Iron & Steel Group Co., China’s fourth-largest steelmaker, told The Wall Street Journal earlier this month it has no plans to bid. Hebei Iron & Steel Group Co., the second-largest mill, declined to comment.
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