June 11 (Bloomberg) -- OZ Minerals Ltd.’s shareholders approved a plan to sell $1.39 billion of assets to China Minmetals Group to cut debt after the Chinese company sweetened its offer yesterday to fend off rival proposals.

About 92 percent of shareholders voted in favor of the plan at the Melbourne-based company’s annual general meeting in the city today, OZ Minerals said in a statement to the Australian stock exchange. The approval required a minimum of 50 percent of acceptances.

Minmetals, China’s biggest metals trader, gains control of the world’s second-biggest zinc mine and supplies of copper, gold and nickel. The acquisition may ease Chinese concern about investment in Australia after Rio Tinto Group scrapped a $19.5 billion investment by Aluminum Corp. of China last week in favor of an iron venture with BHP Billiton Ltd.

The sale “secures the future of our current operations for the benefit of all stakeholders,” Chairman Barry Cusack said today at the meeting.

OZ Minerals shares were halted today and will resume tomorrow. The stock fell 2.2 percent to 89 cents yesterday on the Australian stock exchange, giving it a market value of A$2.8 billion. Minmetals is advised by UBS AG and OZ Minerals is advised by Goldman Sachs JBWere Pty.

Offer Raised

State-controlled Minmetals yesterday raised its offer by $180 million, or 15 percent, after OZ Minerals this week said it had received two alternative proposals. The Minmetals Australian unit will be based in Melbourne and will hire about 70 percent of OZ Minerals workers, Mark Liu, Minmetals project director for the transaction, told reporters today in Melbourne.

Minmetals president Zhou Zhongshu will visit Australia next week, the company said in an e-mailed statement. The company expects to complete the purchase within a week, Liu said.

“The strategy for our company is growth outside of China with a vehicle like OZ Minerals,” Liu said. “That’s how we see our future of the company. We very much rely on the expertise and experience those people bring across from OZ Minerals.”

OZ Minerals will use the funds from the sale to pay A$1.1 billion in debt and help finance exploration and expansion at its Prominent Hill mine in South Australia and other projects in the country and overseas. The A$1.2 billion Prominent Hill operation will now be the company’s primary source of revenue.

Two unsolicited recapitalization proposals, including a $1.2 billion plan by RFC Group and Royal Bank of Canada, were inferior to the Minmetals bid, OZ Minerals said June 8. RFC Group and RBC Capital Markets’s recapitalization plan is due to expire at 5 p.m. local time today.

The second proposal was withdrawn yesterday, OZ Minerals’ Cusack said today. Macquarie Group Ltd. withdrew a $1.4 billion proposal to recapitalize OZ Minerals through the issue of 2.54 billion OZ shares, the Australian newspaper said.

Minmetals was blocked from a full takeover of OZ Minerals by Australian Treasurer Wayne Swan in March because of the Prominent Hill mine’s proximity to the Woomera weapon testing range.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net

Last Updated: June 11, 2009 03:07 EDT