Agreement has been reached between OZ Minerals and China Minmetals Non-ferrous Metals Co for a recommended cash offer of A$0.825/share under a scheme of arrangement, valuing OZ Minerals’ equity at approximately A$2.6 billion. The offer price represents a premium of 50% to the last traded price of OZ Minerals on November 27. OZ Minerals shareholders also benefit from the certainty of all-cash consideration in a volatile market. This provides increased certainty for OZ Minerals’ key stakeholders including financiers, employees, relevant regional communities and suppliers. OZ Minerals will continue to be headquartered in Australia. The transaction is unanimously recommended by OZ Minerals’ Board of Directors (subject to no superior competing proposal and independent expert confirming the transaction is in the best interest of OZ Minerals shareholders).

OZ Minerals is proceeding with its previously announced asset sale program in relation to Martabe and Golden Grove. Minmetals’ price will increase if the aggregate net sale proceeds received for those assets exceeds $425 million.

Barry Cusack, Chairman of OZ Minerals, said: “The Board has determined that Minmetals’ cash proposal is in the best interests of OZ Minerals’ shareholders and believes this is the best outcome for shareholders compared with any of the other options available to us. It provides shareholders with a significant premium to the last price at which our shares traded. It is also significantly higher than the price at which we believe OZ Minerals shares would trade in the absence of the offer.”

“Minmetals is one of China’s leading metals and mining companies and it has substantial international operations. Minmetals will be able to provide significant financial support to OZ Minerals in pursuing developments and other growth opportunities.”

Andrew Michelmore, Managing Director and CEO of OZ Minerals, said: “OZ Minerals has a portfolio of high quality assets and, in particular, has a strong track record of successfully completing projects such as our worldclass copper and gold mine at Prominent Hill. However, following the rapid decline in commodity prices in late 2008, it has been a testing period for OZ Minerals, our shareholders, our financiers, our employees and our suppliers.

“OZ Minerals has been working with its financiers and progressing various funding options to pay down debt and maximise value for shareholders while providing greater certainty to employees and suppliers. This offer can resolve investor uncertainty. The offer also provides OZ Minerals shareholders with a substantial premium to our last traded share price and the certainty of cash consideration.

“We believe that Minmetals’ proposal provides comfort to our lenders, employees and suppliers and welcome its intent to involve OZ Minerals in Minmetals’ development plans. Minmetals has confirmed that it intends to continue to operate current OZ Minerals operations which, in turn, will benefit employees and relevant local communities and also provide certainty to businesses beyond those operated by OZ Minerals.”

The transaction is designed to facilitate a complete solution to OZ Minerals’ current debt issues. OZ Minerals is seeking to refinance or extend its current debt facilities by February 27 and will be requesting its lending banks to provide interim support to enable OZ Minerals to complete the proposed transaction with Minmetals. The receipt of OZ Minerals lending banks’ interim support is a key condition of the Minmetals offer. If Minmetals acquires 100% of OZ Minerals under the scheme of arrangement, it is committed to repaying all of OZ Minerals’ outstanding debt upon implementation of the transaction. It is also Minmetals’ intention to allow early redemption of, or otherwise acquire, OZ Minerals’ 5.25% outstanding 2012 convertible bonds. Under the terms of the transaction, OZ Minerals has retained flexibility to pursue certain funding options, including the potential sales of Golden Grove and Martabe, to address its short-term cash requirements and allow it to work with its banking syndicate towards extending or refinancing its banking facilities.

A combination of Minmetals’ and OZ Minerals’ assets will create a worldclass metals and mining group. OZ Minerals will continue to be domiciled in Australia with its staff retained. Importantly, OZ Minerals will generate substantial economic benefit for Australia.

Zhou Zhongshu, Chairman of Minmetals, said: “This transaction represents an excellent outcome for all OZ Minerals stakeholders, including OZ Minerals’ shareholders, who will receive an attractive cash price for their shares. “OZ Minerals has a number of assets that complement Minmetals’ non-ferrous asset portfolio. Minmetals has significant operations on five continents, including in Australia, Europe, North America and South America.

“Minmetals intends to continue to operate OZ Minerals’ portfolio of assets and its acquisition will provide the opportunity to support the development of OZ Minerals’ assets and projects. Minmetals will provide a robust platform for OZ Minerals to realise its growth potential when market conditions permit.

“We believe this offer has significant merits that will provide stability to operations and certainty to OZ Minerals employees. We will work constructively with relevant regulatory authorities in order to complete the transaction and ensure that the significant benefits for both Minmetals and OZ Minerals stakeholders are achieved.”

OZ Minerals is Australia’s third largest diversified mining company and is the world’s second largest producer of zinc as well as a substantial producer of copper, lead, gold and silver. OZ Minerals was formed in 2008 through a merger of Australian based, international mining companies Oxiana and Zinifex. The company currently has mining operations located in Australia and Asia and a large portfolio of advanced and early stage exploration projects throughout Australia, Asia and the Americas.

China Minmetals Corp (CMC), founded in 1950 in Beijing, China, is focused on the development, production, trading and operation of metals and minerals globally. It is also engaged in finance, real estate and logistics. In 1999, CMC was listed among the 44 “key enterprises” in China. It is ranked 412 among the Fortune Global 500 companies. CMC plays a major role in promoting exchanges and cooperation between enterprises from PRC and other countries. CMC has a network of over 44 overseas subsidiaries operating in more than 15 countries.

CMC’s non-ferrous metals division (Minmetals) focuses on the exploration, development and production of strategic metals including copper, aluminium, tungsten, antimony and zinc. Through its strategic relationship with KGHM Polska Miedź, it is China’s largest importer of copper and is committed to expanding its copper business having established a 50:50 joint venture with Codelco, the world’s largest and oldest copper producer, to develop copper resources in Chile and, together with Jiangxi Copper, recently acquired a 60% interest in Northern Peru Copper amongst other interests.

Minmetals’ aluminium business comprises mining, smelting, refining and fabrication investments. It has invested in Guangxi Huayin Aluminium Co, which has an annual production of 1.6Mt of alumina and additionally Minmetals has a 30 year, 400,000 t/y off-take contract for alumina with Alcoa in Australia and have obtained the mining rights over 150 Mt of bauxite in Jamaica in a jointly funded exploration project. Minmetals also has aluminium foil processing capacity of 60,000 t/y through its investment in Huabei Aluminium Co.

Minmetals has invested in tungsten mining and production of tungsten products in Jiangxi Province. Additionally, Minmetals has been actively involved in the exploration of non-ferrous metals resources including tungsten and molybdenum mines in Guangxi, tungsten and other metal resources in Guangdong and silver and other metals reserves in Gansu. www.minmetals.com.