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March 6, 2008 |
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ZINIFEX: Assures No Job Losses in Century Mine Zinifex Limited told ABC News that there should not be any job losses at the Century mine in northwest Queensland, Australia, as a result of its announced merger with Oxiana Limited. The friendly deal between the two mining companies will see the new company as the world's second largest zinc producer, ABC News says. Both companies are recommending shareholders support for the deal, the report says. The general manager in Century, John Lamb, told ABC News that 1,200 people are employed at the site and the deal will only mean more opportunities for staff to progress in a larger company. "On the operating mines, particularly the big ones like Century, it's business as usual," Mr. Lamb said to ABC News. "The merger for most of our people is unlikely to change their roles at all." Mr. Lamb added that Century is Zinifex's largest asset and it will still be the largest asset in the combined company, ABC News reports. Zinifex, with a market capitalization of AUD5.6 billion, is the world's third largest zinc producer, supplying approximately 5% of global zinc concentrate and about 1% of global demand for lead. Its major assets are the Century and Rosebery mines. Zinifex is also in the process of acquiring nickel producer, Allegiance Mining NL, for approximately AUD860 million. Oxiana, with a market capitalisation of AUD5.7 billion, is predominantly a copper, zinc and gold miner with operations both in Australia and Laos. The merger will take place via a Scheme of Arrangement whereby Zinifex shareholders will receive 3.1931 Oxiana shares for each Zinifex share. Zinifex has shown very strong cash flow generation in the last two years as a consequence of buoyant zinc and lead prices. Its cash flow was further enhanced by the divestment of its smelting operations in October 2007, when Zinifex combined its smelting operations with those of Umicore SA to form Nyrstar NV. Zinifex currently has over AUD2.2 billion cash on its balance sheet, while Oxiana has a low net debt of AUD174 million. Oxiana is not rated by Fitch. * * * As reported on Mar 5, 2008, Fitch Ratings has placed Zinifex Limited's 'BB+' long-term foreign currency Issuer Default Rating on Rating Watch Positive, following the announcement of a merger proposal with Oxiana Limited, whereby both companies will own 50% each of a new company yet to be named. The rating watch is expected to be resolved within six months by which time the structure of the merged entity, including its debt structure, will be clearer. |
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