Nascent Chinese PE To Facilitate Overseas Deals

With ongoing controversy surrounding overseas acquisitions continuing to hamper China's attempts to secure resources, domestic private equity funds are reportedly raising billions of dollars aimed at brokering smaller energy deals abroad. As CFW has previously shown, high-profile deals such as the Chinalco-Rio Tinto tie-up, or Minmetals' US$850mn deal with OZ Minerals have proven increasingly politically sensitive, and with smaller tie ups less likely to raise hackles or make headlines, state-backed PE buyers might indeed stand a better chance of closing overseas acquisitions. Indeed, this year we have already seen Chinese state-owned China Nonferrous Metal Mining Group (CNMC) agreed to take a majority stake in Australian rare earths miner Lynas for roughly US$186mn. Zheng Zhi, Chairman of China Mining United Fund (a group of around 300 mining investors) said recently that the fund had already raised CNY500mn (US$73.25mn) and aims to raise up to CNY10bn in a bid to target meals resources in Western Europe, Africa and Australia, and is Zheng is already investigating about 30 projects

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