VANCOUVER - A Chinese company has signed a deal to acquire a 19.9 per cent stake in Ivanhoe Mines Ltd. for $723 million that the miner plans to use to fund the development of its projects in southern Africa.

CITIC Metal Co. Ltd., a wholly owned subsidiary of Chinese state-run conglomerate CITIC Ltd., has agreed to acquire 196.6 million shares at a price of $3.68 per share.

Under the deal, CITIC Metal will become Ivanhoe's largest single shareholder, while Robert Friedland, executive chairman of Ivanhoe Mines, will be the company's second-largest shareholder.

CITIC Metal will have the right to nominate two directors to Ivanhoe's expanded 11-member board. One CITIC Metal nominee is expected to be Sun Yufeng, president of CITIC Metal Group, who is also expected to become a co-chairman, a position he will share with Friedland.

CITIC Metal will be granted anti-dilution rights to enable it to maintain its Ivanhoe ownership at 19.9 per cent.

The Chinese company has also agreed to help arrange project financing for the first phase of development for the Kamoa-Kakula project in the Democratic Republic of Congo.