Western Mining to buy into steel mill for $161 mln

SHANGHAI, Nov 19 (Reuters) - Western Mining Co (601168.SS) said on Wednesday it plans to purchase a 39 percent stake in Xining Special Steel Group from its parent for 1.1 billion yuan ($161.2 million).

Western Mining, China's fourth-largest zinc smelter and second-largest lead miner, will pay Western Mining Group up to 40 percent of the transaction amount as prepayment, according to a company statement posted at the Shanghai Stock Exchange.

The deal will need the approval of shareholders and the provincial authorities.

Xining Special Steel Group is the controlling shareholder of listed Xining Special Steel Co (600117.SS) with a 49.87 percent stake, according to the listed firm's first-half earnings report.

Western Mining shares on the Shanghai Stock Exchange were trading at 6.55 yuan on Wednesday morning, down 0.3 percent, while the Shanghai Composite Index .SSEC was up 0.8 percent.

A unit of Goldman Sachs (GS.N) owns just over 8 percent of Western Mining. ($1=6.823 Yuan) (Reporting by Rujun Shen; Editing by Edmund Klamann)