China privately told to put its mine deals in Australia on hold

April 25th, 2008 - 5:08 pm ICT by admin  

Melbourne, Apr.25 (ANI): At least 10 Chinese companies have withdrawn foreign investment applications to buy into Australian resources companies under pressure from the Kevin Rudd Government.
The Australian Government has made it plain that it wants more time to consider the issue of the national interest in terms of ownership of the Australian resources industry.
According to The Australian, Chinese companies have been politely but firmly given the unprecedented message that it would be preferable to back off and resubmit any such applications to the Foreign Investment Review Board at a later date.
The issue is being handled discreetly at high levels. Any outright rejection or publicly conceded delay would be extremely difficult politically, particularly given the great importance of China to the Australian economy.
The Chinese Government is aware of what is happening and would have to have given approval or encouragement to the individual Chinese companies involved to follow the route of least resistance for now.
The companies involved include Sinosteel, which has already had a 1.2 billion dollar bid approved for West Australian iron ore producer Midwest, in early January. That bid has since turned hostile.
Antam will resubmit its withdrawn bid for Herald Resources because Antam is a joint venture between an Indonesian company and Chinese metals and mining company Zhongjin.
China Metallurgical is to have been forced to stall its 400-million dollar bid for Cape Lambert Iron Ore after lodging a FIRB application last month.
Under Australian rules, foreign investors must seek government approval if they wish to take more than 15 per cent of a company worth more than 100-million dollars.
The FIRB advises the treasurer, who has 30 days to object before it is deemed accepted.
Alternatively, the board can rule it wants a 90-day extension but this order is then made public - publicity many companies prefer to avoid. (ANI)

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