The $1.66 billion bid is well below Minmetals' original $3.5 billion offer, and excludes the flagship Prominent Hill mine, as well as the Martabe project in Indonesia and exploration rights in Cambodia and Thailand .
Canberra scuttled the first bid on national security grounds because it included the copper-gold mine at Prominent Hill, which is located near a military rocket testing range.
OZ Minerals told the Australian Stock Exchange it had reached a binding agreement with state-owned Minmetals which would leave it with a cash balance of $500 million.
"Once implemented this transaction will provide a complete solution to our financing issues and see shareholders retain their OZ Minerals shares and therefore exposure to the Prominent Hill operation and its long-term growth profile,'' said OZ chief Andrew Michelmore.
OZ said it had revised its original cash balance estimate down from $600 million because of exchange rate movements and other adjustments.
Subject to a shareholder vote, regulatory approvals from Beijing and the green light from Australia's foreign investments review board, OZ said it expected the deal to go through in mid-to-late June.
State-owned Chinese corporations have made a number of bids for Australian mining assets in recent months, including a proposed $26 billion investment in mining giant Rio Tinto by Chinalco which is still under review.
Hunan Valin Iron & Steel Group was allowed to increase its stake in iron ore miner Fortescue Metals Group to up to 17.55 per cent, by investing more than $1 billion. Beijing's interest has sparked intense debate in Australia over whether to allow Chinese state-owned entities to increase their control over the country's resources.
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