MELBOURNE Aug 21 A private Chinese coal company
said it plans to launch a $160 million offer for Inova Resources
Ltd, offering a 29 percent premium for the Australian
copper and gold miner controlled by Rio Tinto's Turquoise Hill
Shanxi Donghui Coal Coking & Chemicals Group said on
Wednesday it had secured a 14.9 percent stake from Turquoise
Hill, which has promised to sell all its shares once Shanxi's
offer is accepted by shareholders representing 51 percent of the
Turquoise Hill, majority-owned by Rio Tinto Ltd
, owns 56.2 percent of Inova Resources and has been
reviewing asset sales or a sale of its stake for more than a
The deal would shore up Turquoise Hill's funding as it faces
a Dec. 31 deadline to repay up to $2.4 billion in debt to Rio
Tinto, which has been funding Turquoise Hill's costs at its
biggest asset, the Oyu Tolgoi copper and gold mine in Mongolia.
Under a recent deal with Rio, Turquoise Hill has agreed to
sell new shares at a massive discount to cover any shortfall in
its debt repayment.
Shanxi Donghui, owned by two brothers, offered 22 cents a
share for Inova, compared with its last trade at 17 cents. The
stock has lost two-thirds of its value this year.
The coking coal, coke and chemicals producer said it would
fund the deal from its cash holdings of more than 1 billion yuan
"Shanxi Donghui's offer provides Inova shareholders with
certainty of value at an attractive, risk-free, cash premium for
their investment," the Chinese firm said.
Inova owns the Osborne copper and gold mine, the Mount
Elliott copper and gold project and the Merlin molybdenum and
rhenium deposit, all in the state of Queensland.