Chinese Group Won’t Buy U.S. Gold Mining Company

Chinese Group Won’t Buy U.S. Gold Mining Company
By ERIC LIPTON
Copyright by The New York Times
Published: December 21, 2009
http://www.nytimes.com/2009/12/22/business/global/22invest.html?ref=global-home


WASHINGTON — A company controlled by the Chinese government has notified the Obama administration that it is withdrawing its application to buy a Nevada gold mining company to avoid a conflict after federal officials raised “serious, significant and consequential national security” concerns.

The decision by Northwest Nonferrous International Investment Company, at least for now, eliminates a showdown over the tiny company, the Firstgold Corporation. The Treasury Department on Monday was prepared to recommend that President Obama block the deal.

“It is disappointing,” the chief executive of Firstgold, Terry Lynch, said Monday. “It means the whole deal is over. It won’t go to the president, because there is nothing to send to him for approval.”

Officials at the Treasury Department, which oversees the review panel known formally as the Committee on Foreign Investment in the United States, have not publicly said what the explicit cause of the security concern is, as the process is confidential.

But in meetings with Firstgold executives, the federal officials cited the proximity of the company’s four Nevada properties — most of which operate on leased federal land — to the Fallon Naval Air Station, as well as “other sensitive and classified security and military assets that cannot be identified,” according to a summary of a conference call held last week.

Northwest Nonferrous is a giant Chinese-run mining company, with more than 6,000 employees, that is in the midst of a push to expand its global presence by buying up mines, or investment in mining operations, including in the southwest Yukon section of Canada.