China’s aggressive bids in the mining industry: its counter-attack against the West?

State-owned China Minmetals Corp has made a $6.3-billion offer in cash to acquire canadian copper producer Equinox Minerals Ltd. Equinox operates, notably, mines in Zambia and in Saudi Arabia. Recently, Equinox has made an offer to acquire Lundin Mining Corp, which was rejected. This bid now by Minmetals sinks Equinox’s offer for Lundin anyway. The bid also shows a change of attitude on the part of China in relation with takeover tactics. They seem to want to adopt the western attitude. Apparently, if the bid is successful, Minmetals will still want to get their hands on Lundin, which would make them an important player in the copper industry.

Question: Is this China’s response to the « uprisings » (see my earlier posts: this, this and this) in the Middle East, through which the western world seems to be reaffirming its control over the resources, oil and others? In other terms, instead of counter-attacking militarily to the West’s aggressive takeover moves for resources in the Middle East, China has chosen to, for the moment, use economic and financial tools to achieve that same goal? With a population of 1.5 billion, their need and hunger for raw materials and energy is insatiable and will just keep growing. How long will they be able to restraint their efforts like this to get the resources they need without deploying more agressive solutions, such as military means? I don’t know. But we are certainly witnessing on their part a change of strategy. Their economy is roaring and with all these mouths to feed and these industries to furnish materials and energy to, it is just a question of time before things get a little more physical. The second article shows that, although copper doesn’t seeem like a good investment at this time, the Chinese want to have a bigger chunk of the cake.



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