Australian iron ore miner, Sundance Resources is poised to reveal that the Chinese regulator has provisionally approved Hanlong Mining's proposed A$1.7 billion ($1.79 billion) takeover offer, and the Chinese miner will return with a amended lower offer, the Deal Journal Australia reported, citing a person familiar with the matter.

Sundance had yesterday requested for a trading halt (See: Sundance Resources in trading halt ahead of Chinese regulatory approval) and was expected to make an announcement today ahead of the Chinese regulator's decision on the deal, but the Perth-based company remained tight-lipped on China's National Development and Reform Commission's (NDRC) decision.

Although Hanlong Mining is a privately-held company, the deal still requires the approval from the NDRC before it can close the transaction. The Australian regulator, The Foreign Investment Review Board, had already approved the deal in late June.

The Deal Journal said that the board of Sundance is likely to recommend a 12 per cent lower offer from Hanlong Mining due to a change in market conditions.

In July last year, Hanlong, with an 18.6-per cent stake in Sundance, had offered to buy the remaining shares it does not already own in the Australian miner for A$0.57 a share or A$1.7 billion, a 25-per cent premium to Sundance's closing price of A$0.40 on 16 July.

Last year Hanlong acquired the stake from the estate of the late Australian mining mogul Ken Talbot at A$0.44 a share, a year after his death in a plane crash in Africa.

The Deal Journal said that Hanlong's new bid will be at A$0.50 a share or A$1.57 billion ($1.5 billion). Sundance shares traded close to A$0.33 when trading was halted yesterday.

Commodities prices have tumbled since the past eight months and Chinese demand has been slowing due to the global economic turmoil.

Iron ore prices have fallen to their lowest level in over two years from a high of $146 a ton in January to $120 a ton last month, and Sundance share price has fallen from A$0.40 in July to A$0.33 yesterday.

Falling iron ore and coal prices could also force the consortium led by Australian mining magnate Nathan Tinkler to lower its takeover offer for Whitehaven Coal from a A$5.20 a share or A$5.3 billion, The Deal Journal said, citing a person familiar with the matter.
Last month, the Tinkler-led group went directly to Whitehaven Coal's shareholders with a$5.3-billion offer, a month after Whitehaven, Australia's second-biggest independent coal producer, rejected an indicative proposal from Tinkler saying that the offer was too conditional. Tinkler is Whitehaven's largest shareholder with a 21.4-per cent stake (See: Tinkler's consortium launches $5.3-bn bid for Australia's Whitehaven Coal)

Central West Africa-focused Sundance owns a big iron ore deposit on the border of the Republics of Cameroon and Congo.

Listed on the Australian Stock Exchange and with a market capitalisation of more than A$1 billion, Sundance is developing its flagship $4.7-billion Mbalam Iron Ore mine, which straddles the borders of the Republics of Cameroon and Congo.

The project requires a multi-billion dollars investment for building new 500-600km of rail lines, a new multi-user port at Lolabé on the Atlantic coast and other infrastructure.

Once fully developed, the Mbalam project could produce 35 million tonnes a year starting in late 2014 with stage two designed to double that capacity, with higher quality product.

Chengdu-based Hanlong, a subsidiary of the Sichuan Hanlong Group, one of China's largest private conglomerates, is an active acquirer having made substantial investments in commodities such as molybdenum, iron ore and uranium in Australia, the US, Cameroon, Namibia and within China.

It holds a wide portfolio of assets including molybdenum, lithium, gold, rare earths and zinc/lead projects and over the last two years, Hanlong has invested over $500 million across four international mining companies.

The company runs 25 mining projects in China, including gold, iron ore, copper and molybdenum.