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Xstrata pitches bid for miner MIM
By Geoff Hiscock
SYDNEY, Australia (CNN) -- Swiss resources group Xstrata has confirmed it is in talks with Australian miner MIM Holdings about a possible Aust. $3 billion ($1.7 billion) takeover. MIM told the Australian Stock Exchange on Thursday morning that it had received an unsolicited approach from Xstrata. It said it was in "early stage" discussions that could lead to a change of control of MIM. The news sent MIM shares soaring. They jumped more than 16 percent to A$1.46 in early trade Thursday. Market commentators say any successful bid by Xstrata would need to be pitched at about A$1.60, valuing MIM at A$3 billion. MIM is one of the world's biggest coal exporters, and a major producer of copper, zinc and lead. In August it said it aimed to double its annual coal output to 38 million tonnes over the next five years. Agreement 'uncertain'MIM said the discussions with Xstrata were incomplete and it was "uncertain" if any agreement would be reached. It said the company remained focussed on its announced growth strategy. In August MIM reported a fall of almost 15 percent to A$88.9 million ($48.5 million) in full-year profit to June 30. (Full story) That came after it took a writedown of A$115.8 million on its two European zinc smelters and a gain of A$82.3 million from the devaluation of the Argentine peso. MIM holds 50 percent of the giant Argentine copper and gold mine Minera Alumbrera. In Australia, apart from its extensive coal mines, it owns the original Mount Isa underground mine, where it has mined copper, silver, lead and zinc for almost 80 years. Xstrata, which is held 40 percent by the Swiss trading house Glencore, is one of Europe's biggest diversified resources groups. Bought Glencore minesLast year it bought the South African and Australian coal mine assets of Glencore. Xstrata's other big shareholder is the Capital Group Companies Inc, with 15.27 percent. Xstrata, which is listed in London and Zurich, said in a statement confirming the talks with MIM that it was "continually reviewing opportunities with a view to securing transactions which can add value to its shareholders." But it echoed MIM's own statement that the outcome of any discussions was "always uncertain".
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