China's CNMC bows out of LYC

[Sparty]

China firm abandons Aussie miner bid September 24, 2009
Article from: Australian Associated Press

A CHINESE company has abandoned plans to take control of rare earths explorer Lynas Corporation after Australian regulators demanded it reduce the scope of the planned transaction.

Lynas said in a statement today that China Nonferrous Metal Mining (Group) (CNMC) had terminated the proposed $505 million transaction announced in May, whereby it would take a 51.6 per cent stake in the Sydney company.

"As a result of additional undertakings recently sought by the Australian Foreign Investment Review Board (FIRB), CNMC has terminated the CNMC transaction,'' Lynas said.

The additional undertakings recently sought by the FIRB included reducing the proposed percentage ownership to be held by CNMC to below 50 per cent and reducing the number of board director positions to be held by CNMC to less than half of the board.

"These were in addition to already agreed undertakings between Lynas and CNMC aimed at ensuring independent director control of all marketing of rare earths products.''

Market observers say the deal was an example of China's bid to tighten its grip on the rare earths market.
Almost all of the world's rare earths are produced in China.
Lynas' proposed deal with CNMC came under the spotlight earlier this month after a Chinese official recommended banning rare earths exports to prop-up prices. ENDS

IMO This was a fairly predictable response by the FIRB as if they had said yes then they would have upset the US and Japan. There is a world wide fight going on for Rare Earth Dominance and if Australia can keep control of the world's richest deposit at Mt Weld and also keep control of GGG's Greenland deposit Australia could well become an equally dominant player.

Short term this could mean a decline in LYC's share price but my bet is that it will create a massive buying opportunity for those that can see beyond 12/12. I hold LYC and will be accumulating. Visit www.AustralianRareEarths.com for an overview of Australia's Rare Earth companies and deposits.



Summary of LYC | Mt Weld

Summary of GGG | Kvanefjeld

Summary of NAV | Cummins Range

Summary of ARU | Nolans Bore