Xstrata Targets Sphere Minerals

Xstrata may make an unconditional offer for Sphere Minerals Ltd (ASX:SPH) at $428 million if it manages to gain a 50% stake in the company as per Xstrata Coal chief executive Peter Freyberg.

The Swiss mining giant is currently trying to get Sin Tan Development Pte Ltd to sell its 10.77 % stake in Sphere Minerals.

However the Singapore based company said on Wednesday that it was not interested in selling its share in Sphere Minerals to Xstrata. In response Xstrata said that it would allow the $2.50 per share bid to lapse if it failed to gain a controlling stake in Sphere Minerals.

Sphere Minerals Ltd is a Mauritania-focused iron ore mine developer in which Xstrata at present has about 8% stake. Of this more than 5% has been committed by the board of directors of Sphere Minerals.

It is also believed that Sin Tan Development is planning a China backed proposal to fund the Askaf iron ore project in Mauritania in exchange for equity in the project.

The directors of Sphere Minerals have recommended that shareholders accept the offer unless a more lucrative offer emerges.