China's Minmetals says Door Open to Revisit Gaby Deal

China Minmetals Corp, the country's largest trader of base metals, said on Wednesday the door was still open to revisit an option to buy a stake in the Gaby copper mine in Chile, if its Chilean partner agrees.

Codelco, Chile's state-owned copper miner said on Tuesday the two firms had jointly agreed to suspend a deal that gave Minmetals the right to buy about half of the mine.

"Any decisions (about the Gaby deal) will be based on the long-term partnership of the two companies," said an official at Minmetals' public relations office.

"The two companies agreed jointly that they will actively explore opportunities for commercial development globally, especially in Latin America and Africa," said the official.

The Gaby mine, located in northern Chile with capacity to produce about 150,000t of copper per year, is one of the largest new sources of the red metal to enter an extremely tight market in recent years, at a time when prices are still high.

The agreement ends months of speculation about whether Codelco would be able to change the deal, signed in 2005 when copper traded at less than $2.00/lb. Critics called it a strategic misstep by the Chilean producer.

Codelco, a state miner, built the mine in large part thanks to a $550m investment from Minmetals.

In exchange, the Chinese company was to receive copper over the next 15 years at prices below the spot rate to supply China, the world's top metals market, as well as an option to acquire a stake of up to 49% of the Gaby mine.

Codelco's powerful union opposed the second part - selling the stake - from the start, saying it was a national asset and threatening national protests if Minmetals was allowed to exercise the option.

The first part of the agreement was unchanged.

Minmetals has two listed units, Minmetals Resources, listed in Hong Kong, which controls most of its aluminium business, and Minmetals Development Co Ltd in Shanghai, which could be a vehicle for its nonferrous business.

By Alfred Cang, Reuters