Western Mining Plans to Sell $586 Million of Bonds

Western Mining Co., China's fourth- largest producer of zinc concentrate, plans to sell 4 billion yuan ($586 million) of 10-year domestic bonds to fund expansion and acquisitions.

The proceeds will be spent on three existing mine projects and potential takeovers, the Xining, Qinghai province-based company said today in a statement to the Shanghai stock exchange. It also plans to buy stakes in a steelmaker and a resource company for a combined 1.18 billion yuan.

The acquisitions will help Western Mining to control more zinc, lead and silver resources, expand production and cut costs. Zinc, used to galvanize steel, almost halved in the quarter to Sept. 30 because of an oversupply, forcing Western Mining to report a 32 percent decline in profit.

The company plans to pay 1.1 billion yuan for a 39.4 percent stake of Xining Special Steel Group from its parent, the statement said. It also plans to pay 82.7 million yuan for 51 percent of Sichuan Xiashai Silver Industry Co.

Western Mining gained as much as 1.7 percent to 6.68 yuan in Shanghai, and traded at 6.64 yuan at 9:42 a.m. local time. The stock tumbled 10 percent to 6.57 yuan yesterday as China's CSI 300 Index declined 7.4 percent.