JOHANNESBURG South African miner Metorex MTXJ.J said on Tuesday it had received a $1.32 billion offer from China's Jinchuan Group, trumping a bid by Brazilian giant Vale SA (VALE5.SA) and lifting its share price.
The battle for the South African-listed copper and cobalt producer is the latest saga in the scramble for African resources by emerging market giants China and Brazil, which have an insatiable appetite for raw materials to fuel their growth.
It had almost come down to the wire as Metorex shareholders were set to vote on the Vale offer later this month.
Vale, the world's largest iron ore producer, seemed unlikely to be drawn into a bidding war after its chief financial officer earlier told Reuters in London that it would stick with its bid.
Vale has been given eight business days to match or better the Chinese offer. Company officials in Brazil were not immediately available for comment.
Analysts said the offer appeared to value Metorex fairly.
"It is a fair price, but right now the shares are trading below the offer price so there is room for Vale to make a better bid. It depends on their long-range review of the copper price," said Stephen Meintjies, an analyst at Imara SP Reid.
Jinchuan, China's dominant nickel producer, added almost 22 percent to Vale's offer, making 8.90 rand per share for a cash bid at current exchange rates of around $1.32 billion.
Metorex's share price soared 8.46 percent on the news to 8.72 rand.
Metorex said it had not approved any agreement in relation to the Jinchuan offer. However, the companies said in a joint statement that it already had the firm backing of shareholders representing eight percent of Metorex voting rights.
Junchuan said in a separate statement that Metorex had deemed its offer superior.
Metorex is seen as a prized asset for a number of reasons. These include the winner getting exposure to copper and cobalt resources in Zambia and the Democratic Republic of Congo at a time when the outlook for both commodities is bullish.
Its assets include the Chibuluma copper mine in Zambia which produces about 16,000 tonnes of copper per year.
"The proposed acquisition of Metorex represents a unique opportunity for Jinchuan to build a platform to acquire, develop and operate African copper and cobalt projects with substantial growth potential," Jinchuan said in a statement.
The acquisition will see Metorex delisted from the Johannesburg bourse.
This will remove the costs and political risks associated with operating in South Africa, which include compliance with a mining charter aimed at putting more ownership into the hands of previously disadvantaged blacks, union militancy and nationalization talk by radical elements of the ruling party.
South Africa's Standard Bank (SBKJ.J) is the adviser and transaction sponsor for Metorex , while Goldman Sachs International is Jinchuan's adviser on the deal.
(Additional reporting by Tiisetso Motsoeneng and Yumna Mohamed in Johannesburg; Editing by Marius Bosch and David Hulmes)