Xstrata on prowl again in Australia

CITY-listed resources firm Xstrata is on the prowl again in Australia, making a cash offer of A$7.4bn (£2.9 bn) for copper and nickel miner WMC Resources.

WMC said it had turned down the offer but would consider higher bids.

'The board of WMC determined the bid fails to recognise the current and prospective value of WMC's assets and the strategic benefits to Xstrata or other potential acquirers,' the firm said in a statement to the Australian Stock Exchange.

WMC said it had told Xstrata it was willing to have further talks and that any material improvement in the proposal would be given 'due consideration'.

The company owns the world's eighth-largest-known copper deposit, the Olympic Dam project in outback South Australia. It owns the largest uranium deposit and is the third biggest nickel producer in the world.

Xstrata entered the Australian market last year with the bitterly contested takeover of copper and coal miner MIM.

But a prize such as WMC, the last sizeable independent Australian mining group and one trading at relatively modest multiples, is unlikely to go unchallenged by industry giants Anglo American, Rio Tinto and BHP Billiton.

With soaring demand for the metal from China, nickel miners are particularly attractive.