MELBOURNE - Chinese mining group MMG on Tuesday said the era of sharply increasing metals prices had passed, but predicted activity in China would pick up after the leadership transition in Beijing.
With concern in Australia rising over the cooling of the mining boom due to a slowdown in China, MMG Chief Executive Andrew Michelmore said growth would continue, but not at the same rates enjoyed over the past several years.
"Is it forever upwards at ever accelerating rates? No I don't see that happening," he said at a business lunch.
"It's having a sensible adjustment," he said, calling it a changing of gears.
MMG, listed in Hong Kong, run by Australians, and controlled by top Chinese metals trader Minmetals, mines copper and zinc, including operating the world's third-largest zinc mine, Century in Australia.
Michelmore said construction and investment programmes in China, and hence demand for steel and other metals, were going through a lull as the country awaits the political leadership handover later this year and changes at the top of state-owned enterprises stemming from the political shift.
"Obviously until that's settled down any investments going forward won't happen. They'll wait till the new group come in and they'll drive it," Michelmore later told reporters.
"When you look at China at the moment, you look at the import numbers and things, it's sitting there at sort of a bit of a bottom and the question is how much will it pick up."
The key drivers of growth still remained, with China looking to pull 600-million people into the middle class, but uncertainty in Europe and the US was hampering sentiment, he added.
"You look at the fundamentals out of China, the capital consumption -- there's still a hell of a long way to go," Michelmore said.
He played down speculation that the political transition in Beijing may be prolonged into next year, saying that would result in a loss of face for the leadership.
"So I think everything's trying to be pushed to get it done by November," Michelmore said.
MMG bought Africa-focused copper miner Anvil Mining for $1.3-billion earlier this year and has said it is hunting for additional copper, zinc an nickel acquisitions for up to $7-billion, particularly in central Africa's copper belt.
Michelmore said with miners' prices battered there were some attractive potential takeover targets.
"I think that offers opportunity. It's a much better market to do that in, but you have to have the cash, financing to do it, and you also have to have the cash flow from whatever you buy and feel comfortable that it will finance it," he said.
MMG, whose name change was approved this week, is due to report its first-half results on Wednesday.