China Shen Zhou Mining & Resources Enters into Memorandum of Understanding to Acquire Wuling Fluorite – Barite Mining Mineral Processing Companies
BEIJING, Jan. 9, 2012 /PRNewswire-Asia-FirstCall/ — China Shen Zhou Mining & Resources, Inc. (NYSE AMEX: SHZ), (“China Shen Zhou” or the “Company”), a Company engaged in the exploration, development, mining and processing of fluorite, zinc, lead, copper, and other nonferrous metals in China, today announced that the Company signed a Memorandum of Understanding to merge and acquire a number of fluorite and barite mining and mineral processing companies located in the Wuling mountains in the province of Guizhou. Negotiations are expected to be finalized within the next 60 days.
Since 2010, the Chinese government has issued a number of policies designed to raise the barriers to entry for the fluorite mining industry and to encourage fluorite mining companies to merge and integrate. China Shen Zhou, as the largest fluorite mining and mineral processing company in northern China, views the acquisition and integration of high-quality fluorite resources as a key part of the Company’s strategic plan.
Since the Company acquired 55% of Xinyi Mining Company in Anhui province, China Shen Zhou has considered acquiring a number of fluorite and barite rich mining companies located in southwestern China. As a result, China Shen Zhou identified and finished its due diligence on several targeted companies and the parties have reached an initial agreement regarding purchase price and transaction structure. Additional details concerning the acquisitions will be disclosed once the definitive agreements are executed.
Ms. Xiaojing Yu, the CEO of the China Shen Zhou, commented: “The Company has always believed that fluorite, as a widely used yet scarce strategic resource, will be in high demand given continuing economic development in China. China’s Wuling mountains are very rich in resources of fluorite and barite and possess excellent ore quality with low levels of phosphorus and sulfur. Barite is similar to fluorite as it is also a widely used diminishing resource.
“Because of China Shen Zhou’s advanced knowledge of the methods of separation of fluorite and barite ore and of methods of deep-processing of barite, the acquisitions of the Wuling mountain fluorite and barite resources will greatly enhance the Company’s reserves, laying the foundation for China Shen Zhou to become one of the largest fluorite mining and processing companies in China. Meanwhile, we will use the acquired barite resources to greatly improve the Company’s mining, processing and production capabilities.
“Furthermore, China Shen Zhou plans to work with local governments as well as both upstream and downstream enterprises to build a high-quality processing center and chemical industrial base to produce low-phosphorus and low-sulfur fluorite.”
Barite is a mineral consisting of barium sulfate, with a chemical composition of BaSO4, and is the largest natural mineral containing barium. Also, it is the largest source of barium. China is rich in barite, with barite reserves and production ranked the first in the world. Barite mines in China are mostly located in Guizhou province, which contains 34% of the total barite reserves in China.
Barite powder, the primary product of barite, is mainly used in the oil and gas industry as a weighting agent. Deep-processed precipitated barium sulfate, the raw material for making barium salts, is widely used in coatings, paints, inks, daily chemical products, textiles, papers and other products. Barite is categorized as a protective, non-metallic mining mineral by the Chinese Ministry of Land.
About China Shen Zhou Mining & Resources, Inc.
China Shen Zhou Mining & Resources, Inc., through its subsidiaries, is engaged in the exploration, development, mining, and processing of fluorite and nonferrous metals such as zinc, lead and copper in China. The Company has the following principal areas of interest in China: (a) fluorite extraction and processing in the Sumochaganaobao region of Inner Mongolia; (b) fluorite extraction and processing in Jingde County, Anhui Province; (c) zinc/copper/lead processing in Wulatehouqi of Inner Mongolia; and (d) zinc/copper exploration, mining and processing in Xinjiang.
For more information, please visit http://www.chinaszmg.com/.
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SOURCE China Shen Zhou Mining & Resources, Inc.