CHINA widened the overhaul of its State sector as China Minmetals Corp., its biggest metals trader, agreed to buy a government-owned engineering and mining group, combining two State enterprises with about US$96 billion in sales.

    China Metallurgical Group will be folded into China Minmetals as a wholly-owned subsidiary, according to a statement by China’s State-owned Assets Supervision and Administration Commission (SASAC) on Tuesday. A new, listed company will be created afterward, according to a person with knowledge of the situation.

    The combined revenues of China Minmetals and China Metallurgical amounted to about 614 billion yuan (US$96 billion) in 2013, the last year for which figures for both companies are available. The world’s largest miner, BHP Billiton Ltd., had sales of almost US$66 billion in the same year.

    “China Minmetals will increase its reserves for metal ores including copper, zinc and nickel, and gain market share in the steel market” after the acquisition, Bloomberg Intelligence analyst Yi Zhu wrote in a note yesterday.

    The company may also reorganize units to cut overlap, with subsidiary MMG Ltd. potentially injecting metal assets into China Metallurgical’s Hong Kong-listed unit, Metallurgical Corp. of China Ltd. (MCC), to gain access to overseas markets, Yi said.

    China Minmetals, based in Beijing, owns 74 percent of MMG, which has zinc and copper mines in Australia and which acquired the Las Bambas copper project in Peru from Glencore Plc. in 2014. The company has imported industrial raw materials to China since 1950 and remains the nation’s leading global and domestic trader of metals.

    China Metallurgical, traditionally a steel plant builder, gets 85 percent of its revenues from engineering and construction projects, including everything from redeveloping shanty towns to building highways and exhibition centers. Its resource business is relatively small, including the loss-making Ramu nickel mine in Papua New Guinea. In 2007, MCC won the rights to develop the Aynak copper belt in Afghanistan, a project that has stalled amid disputes with the government in Kabul. (SD-Agencies)