Lynas Corp waits approval for acquisition
Lynas Corporation which owns the richest deposit of rare earths metals in the world in Australia, has signed a $100 million deal with China Iron & Steel Industry Trade Group Corp. (CSG) in September 2003 to purchase a 40% stake in the Channar iron ore mine in Pilbara, Australia. However, the completion of the acquisition can be at risk due to the approval that will be given by Channar's 60% owner and operator Rio Tinto Corp. Rio Tinto believes that this acquisition will block the pre-emptive rights of its subsidiary Hamersley Iron Ltd. Accordingly, Rio Tinto has halted the acquisition by getting a court injunction. The acquisition may proceed in two stages. The first stage may result in the acquisition of 49% stakes from the companies that own Channar. This will not prevent the pre-emptive rights of Harmsley. Moreover, the second stage may result by purchasing 100% stakes which required the approval of Rio Tinto.