China's economic planning agency has agreed to the proposed $1.2 billion acquisition of Oz Minerals by China Minmetals Non-ferrous Metals Co., one of several required approvals, the Australian company said Monday.

 

The approval by the National Development and Reform Commission in Beijing follows a go-ahead from Australia's Federal Treasurer Wayne Swan.

 

In a statement, Oz Minerals said Minmetals had told it that it has gotten binding commitments from its financiers to allow the deal to go through.

 

The companies expect to get further needed Chinese approvals, from the Ministry of Commerce, the State Administration of Foreign Exchange and the State-owned Assets Supervision and Administration Commission, before Oz Minerals' annual shareholders meeting on June 11, it said.

 

"While several further Chinese regulatory approvals are required," said Barry Cusack, Oz Minerals' chairman, "We are aware of the significance of the NDRC approval that Minmetals has advised us of today."

 

The deal adds to a string of foreign acquisitions by China's cash-rich metals and energy producers. They have been welcomed as saviors by some struggling foreign companies but the spending has sparked debate over whether Chinese state-owned enterprises should be allowed to control key mineral resources.

 

Minmetals Nonferrous Metals Co. will acquire Oz Minerals mining operations in five areas that produce zinc, copper, lead and silver, while Oz Minerals will retain a gold and copper mine lying in a military area.