UPDATE 1-China's CITIC to buy 20 pct stake in Ivanhoe for C$723 mln

(Adds details on deal, background)

June 11 (Reuters) - A unit of Chinese state-run conglomerate CITIC Ltd will buy a near 20 percent stake in Canada’s Ivanhoe Mines for about C$723 million ($555 million), the companies said on Monday.

Ivanhoe said it will use the proceeds to advance projects in southern Africa, including in the Democratic Republic of Congo.

Copper miners including Invahoe have threatened legal action if their concerns over a new mining code in Africa’s top copper producer Democratic Republic of Congo is not met.

The code was set to be signed into law by Democratic Republic of Congo’s prime minister last week.

Under the deal, the Canadian miner will issue 196.6 million shares to CITIC Metal through a private placement at a price of C$3.68 per share.

CITIC Metal will own 19.9 percent of Ivanhoe Mines’ outstanding common shares when the placement is completed, establishing CITIC Metal as Ivanhoe’s largest single shareholder.

$1 = 1.3013 Canadian dollars Reporting by Parikshit Mishra in Bengaluru Editing by Saumyadeb Chakrabarty, Bernard Orr