CGH Chaarat Gold Holdings Ltd

High commodity prices have made most mining assets too expensive for acquisitions, a senior executive at China Nonferrous Metals Co. Ltd. (8306.HK) said Tuesday.

"It's sort of like a bubble," Executive VicePpresident Zhang Keli told Dow Jones Newswires in an interview on the sidelines of a conference here. "The price of all the commodities are going up quickly, so the market value is increasing significantly."

CNMC remains on the lookout for potential acquisitions, while it plans to spend $1 billion on its own mining operations this year, Zhang said.

"We see opportunities in a lot of places, but just flashes," and acquirers have to move quickly, he said.

CNMC is a state-owned company that has been aggressive in expanding abroad, with stakes in mines and smelters in over 30 countries.

Zhang said the company considered bidding for Anglo American PLC's (AAL.LN) zinc assets but found the prices too high.

CNMC prefers to invest in copper among nonferrous metals, but it is also investing in nickel, zinc, lead and rare earths assets.

It expects the Zambia-China economic and trade cooperation zone that it built to produce 500,000 metric tons of copper and 5,000 tons of cobalt by 2014. CNMC is also interested in gold, as the metal is often produced as a byproduct of nonferrous mines, Zhang said. CNMC has a stake in Canadian gold miner Chaarat Gold Holdings Ltd. (CGH.LN), which has a mine in Kyrgyzstan.

The company plans to expand in both mining and smelting assets, even though mining has bigger profit margins, Zhang said.

The benefits of investing in smelting plants near the mines is that it trains and employs more local people and the country gains more value from its mineral resources, he added.

"We're not trying to seek the utmost profit, we are only trying to have a reasonable profit," he said.

Zhang didn't elaborate on what minimum return the company seeks on its investments.

Company Web site: www.cnmc.com.cn/en

-By Matthew Walls, Dow Jones Newswires; +44 (0)20 7842 9412; alex.macdonald@dowjones.com

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