JOHANNESBURG (miningweekly.com) – Australian diversified miner Oz Minerals said on Friday that it was in discussions with China’s Minmetals, after Treasurer Wayne Swan rejected a takeover transaction.

MD Andre Michelmore said that it would look at possible changes to the proposed A$2,6-billion deal.

The transaction was rejected because Oz Minerals’ Prominent Hill mining operations are situated close to a weapons-testing range in South Australia.  

“It is not unusual for governments to restrict access to sensitive areas on national security grounds,” Swan said in a statement.

He said that the government had determined that Minmetals’ proposal for Oz Minerals could not be approved, if it included Prominent Hill.

Discussions between the Foreign Investment Review Board and Minmetals were continuing in relation to Oz Minerals' other businesses and assets, and Swan said that the government was willing to consider alternative proposals relating to those other assets and businesses.

Meanwhile, Oz Minerals said that it remained in “constructive” negotiations with its banks, regarding the extension of certain of its loan facilities due on March 31.

The company previously warned that there was a “material possibility” that it would be unable to continue operating, should the Minmetals deal not proceed.

The Chinese firm proposed to fully repay Oz Minerals’ A$1,2-billion debt facilities, which would resolve the company’s current financial crisis.

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