China government OKs Minmetals' OZ Minerals deal

SYDNEY Mon May 18, 2009 2:22am EDT

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SYDNEY (Reuters) - China's top economic body has approved state-owned Minmetals' agreed $850 million deal to buy debt-laden Australian miner OZ Minerals Ltd (OZL.AX), bringing Minmetals a step closer to completing the transaction.

Metals firm Minmetals also told OZ Minerals it has received binding financing agreements for completion of the deal, OZ Minerals said in a statement on Monday.

The deal still needs other Chinese regulatory approvals, including from the commerce ministry and the state administration of foreign exchange, all of which are expected to be received before June 11, OZ Minerals said.

OZ shareholders are set to vote on the deal on June 11.

"While several further Chinese regulatory approvals are required statement we are aware of the significance of the NDRC (National Development and Reform Commission) approval," OZ Minerals Chairman Barry Cusack said in the statement.

Last month, the Australian government cleared the deal after rejecting an initial proposal on the grounds that one of OZ Minerals main mines -- Prominent Hill -- was too close to a weapons-testing area.

Earlier on Monday OZ Minerals announced an increase in resources at that mine.

OZ Minerals shares rose 5.6 percent to A$0.76, contrasting with a 1 percent fall in the benchmark S&P/ASX 200 index .AXJO.

(Reporting by Denny Thomas;)

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