Copper market’s biggest whale fuels speculation of a major shift
The world’s single biggest buyer of copper, State Grid Corp. of China, has slowed its purchases of copper wire this year.
Market sources indicate a serious Chinese contender has finally decided to make a bid for Metorex, in opposition to Vale’s $1.1bn cash offer for the South African company.
There has been speculation in the market over such a development since the Vale bid was announced in mid-April, with Jinchuan Mining singled out as the most likely bidder. Jinchuan is the company which now controls Wesizwe Platinum after heading up a Chinese consortium which paid some $940m for 51% of Wesizwe.
It’s significant that Metorex has put out this latest cautionary on the same day it released the circular to shareholders setting out the timetable on the Vale offer over which shareholders are due to vote on July 22.
It’s also significant that a cautionary over an approach which at this stage is described as a “non-binding expression of interest” has been published, given the agreement with Vale that Metorex cannot solicit other bids.
It seems Metorex could be walking a fine line between keeping its shareholders informed of developments and risking being accused by Vale of breaching its agreement.
According to the cautionary notice, “the expression of interest provides for certain pre-conditions to be met before the alternate party will be prepared to express a firm intention to make an offer, inter alia, a due diligence conducted to the satisfaction of the alternate party.
“Shareholders are further advised that there is currently no certainty that Metorex will receive a firm intention to make an offer from the alternate party.”
