UPDATE: Citic Resources Submits New Request To Spin Off Manganese Unit

Citic Resources Holdings Ltd. (1205.HK), a Chinese energy and base metals producer, said Monday it has submitted a new application to the Hong Kong stock exchange about its proposal to seek a separate listing for its manganese mining operation.

Citic Resources decided to resubmit the request for a listing of Citic Dameng Holdings Ltd. because more than six months had elapsed since the original application was filed with the exchange in September 2008, the company said in a statement.

At the midday break, shares of Citic Resources jumped 11.8% to HK$1.70, off an intraday high of HK$1.76, while the benchmark Hang Seng Index rose 0.2% to 20,860.

Citic Resources, which is 11.47%-owned by Singapore state-owned investment company Temasek Holdings Pte. Ltd., said in September 2008 it was hoping to spin off Citic Dameng within months but subsequently put the plan on ice because of volatile market conditions due to the global financial crisis.

The Hang Seng Index has fallen 1.9% since September 2008, but is sharply higher from levels in the months after Citic Resources submitted its plan to list Citic Dameng. The benchmark index fell as low as 10,676 in October 2008 due to poor market conditions during global financial crisis

"We believe that the proposed spinoff will allow Citic Dameng to enjoy enhanced flexibility to grow its business and will enjoy increased ability to make acquisitions," Sun Xinguo, chief executive of Citic Resources, said in the statement.

Citic Dameng, which has operations and assets in China and in Gabon, western Africa, plans to raise up to US$400 million in an initial public offering ahead of a listing in Hong Kong in October, a person familiar with the situation said Monday.

UBS AG (UBS) and Bank of America Merrill Lynch are handling the deal, the person said.

After completion of the listing and reorganisation, Citic Resources' interest in Citic Dameng will fall to less than 50% from 80%, the statement said.

Citic Resources added: "Shareholders and other investors are reminded that no final decision has yet been made by the company or Citic Dameng Holdings as to whether and when the proposed spinoff will be effected."

Citic Dameng owns mining rights to two manganese ore mines in Guangxi Zhuang Autonomous Region in southwestern China and a mining concession in Gabon.

-By Yvonne Lee and David Winning, Dow Jones Newswires; 852-2802-7002; [e-mail]