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Mathew Murphy
April 14, 2009 – 11:06AM

Melbourne-based zinc and gold miner OZ Minerals has signed a binding agreement to sell many of its assets to China’s state-owned Minmetals for $US1.206 billion ($1.65 billion).

The deal, which excludes the Prominent Hill and Indonesia-based Martabe sites, was outlined after the Federal Government knocked back the initial $2.6 billion deal, citing national security issues.

Federal Treasurer Wayne Swan last month rejected the bid from China Minmetals Non-ferrous Metals Co. for all of Oz Minerals because the Prominent Hill mine was deemed too close to the Woomera Prohibited Zone in South Australia.

OZ Minerals chief executive Andrew Michelmore described the new deal as a win for shareholders.

”We are pleased that we have now agreed binding terms with Minmetals,” he said. ”Once implemented, this transaction will provide a complete solution to our financing issues and see shareholders retain their OZ Minerals shares and therefore exposure to the Prominent Hill operation and its long-term growth profile.”

The Age

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