China Nonferrous Metal Mining to Control Australia Rare Earth Project

Australian rare earth miner, Lynas Corporation decided to accept majority control of Chinese state run company, China Nonferrous Metal Mining (Group) or CNMC. Under the scheme, Lynas raises US$ 366 million including capital injection from CNMC and loan from Chinese bank. Lynas tries to restart Mount Weld mining project with the fund.

CNMC purchases 7 million share or 51.6% of Lynas’ outstanding share for A$ 252 million. Lynas expects the new controlling owner paves the way for total US$ 184 million of new bank loan.

The transaction is subject to approval of Chinese and Australian officials and Lynas’ shareholders. The process is expected to take 3-4 months to be concluded.

Lynas plans to make concentrate at mine site in Western Australia and refine into cerium, lanthanum, neodymium and other rare earth elements at plant in Malaysia. The firm planned to start commercial production in July-September 2009. However, the firm was forced to stop the project after the financial crisis squeezed the finance.