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Saturday 26 September 2009
Australia caps Chinese investments in miners
China’s investment in Australian mining companies will be capped by Australian regulators as part of efforts to rein in the mainland’s growing economic influence in the resources-rich nation.
Regulators seek to rein in mainland’s economic influence
Eric Ng and Bloomberg 25 September 2009
China’s investment in Australian mining companies will be capped by Australian regulators as part of efforts to rein in the mainland’s growing economic influence in the resources-rich nation.
An Australian regulator yesterday said Chinese and other overseas investors in major resources companies should limit proposed stakes to no more than 15 per cent to improve their chances of winning approvals for deals.
“We prefer various sorts of co-operative and partnership arrangements,” Patrick Colmer, a director of the Foreign Investment Review Board, said at an Australia-China investment forum in Sydney yesterday. “What we are looking for is a win-win situation.”
In new projects, overseas investors should limit investments to less than 50 per cent, he said.
Chinese investments have faced increasing scrutiny from Australian lawmakers in the past year as the world’s biggest metals consumer accelerates takeovers amid the global recession.
Xiong Weiping, the chairman of Aluminum Corp of China (Chinalco), said this month mainland firms would step up the pace of overseas mergers and acquisitions in a “new wave” of deals.
Chinese mergers and acquisitions this year in Australia had reached US$9 billion by the middle of last month, more than treble the figure for the same period last year, data provider Dealogic said.
The Foreign Investment Review Board studies applications and makes a recommendation to Treasurer Wayne Swan, who can accept or reject its findings. Swan last month announced changes to the law to allow overseas investors to buy as much as 15 per cent of a company with a market valuation of up to A$219 million (HK$1.48 billion).
Australian firms should alert the board to deals that could cause concern before they were signed, Colmer said. “Talk to us early. Don’t turn it into a legal” argument.
His comments came as Australia rejected a US$400 million proposal yesterday by state-owned China Nonferrous Metal Mining (Group) to take a majority stake in rare earths producer Lynas Corp, which said the regulatory body had ordered the mainland firm to limit its stake purchase to less than 50 per cent.
Australia’s Department of Defence yesterday knocked back a proposed joint venture between Wuhan Iron and Steel and Western Plains Resources in South Australia, saying the mining area was too close to the Woomera weapons testing ground.
Foo Choy Peng, an associate director of China research at UOB Kay Hian, said capping investment was a practical way of addressing domestic concerns that Australia might lose control of its resources to overseas firms.
“In cases of smaller miners and smaller deals, Australia may allow China to buy greater stakes since it is more difficult for them to get bank financing,” she said.
BOC International analyst Belle Chan noted a trend among mainland firms to go after small to medium-sized mining firms and projects in Australia. That followed Chinalco’s failed attempt earlier this year to double its stake in Rio Tinto to 18 per cent amid opposition from Australian politicians and Rio’s shareholders.
The review board had processed about 90 proposed Chinese investments valued at about A$34 billion in the past 18 months, Colmer said.
China was now probably the third-biggest foreign investor in Australia after the United States and Britain, he said.
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Lara began his cricket career while at school in Fatima College. When he was 14, he played in the under-16 and First Divisions of national schoolboys' cricket. He amassed 745 runs in the schoolboys' league that year at an astounding average of 126.16 per innings. Immediately afterwards he was selected for the Trinidad national under-16 team.
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Australia caps Chinese investments in miners
Regulators seek to rein in mainland’s economic influence
Eric Ng and Bloomberg
25 September 2009
China’s investment in Australian mining companies will be capped by Australian regulators as part of efforts to rein in the mainland’s growing economic influence in the resources-rich nation.
An Australian regulator yesterday said Chinese and other overseas investors in major resources companies should limit proposed stakes to no more than 15 per cent to improve their chances of winning approvals for deals.
“We prefer various sorts of co-operative and partnership arrangements,” Patrick Colmer, a director of the Foreign Investment Review Board, said at an Australia-China investment forum in Sydney yesterday. “What we are looking for is a win-win situation.”
In new projects, overseas investors should limit investments to less than 50 per cent, he said.
Chinese investments have faced increasing scrutiny from Australian lawmakers in the past year as the world’s biggest metals consumer accelerates takeovers amid the global recession.
Xiong Weiping, the chairman of Aluminum Corp of China (Chinalco), said this month mainland firms would step up the pace of overseas mergers and acquisitions in a “new wave” of deals.
Chinese mergers and acquisitions this year in Australia had reached US$9 billion by the middle of last month, more than treble the figure for the same period last year, data provider Dealogic said.
The Foreign Investment Review Board studies applications and makes a recommendation to Treasurer Wayne Swan, who can accept or reject its findings. Swan last month announced changes to the law to allow overseas investors to buy as much as 15 per cent of a company with a market valuation of up to A$219 million (HK$1.48 billion).
Australian firms should alert the board to deals that could cause concern before they were signed, Colmer said. “Talk to us early. Don’t turn it into a legal” argument.
His comments came as Australia rejected a US$400 million proposal yesterday by state-owned China Nonferrous Metal Mining (Group) to take a majority stake in rare earths producer Lynas Corp, which said the regulatory body had ordered the mainland firm to limit its stake purchase to less than 50 per cent.
Australia’s Department of Defence yesterday knocked back a proposed joint venture between Wuhan Iron and Steel and Western Plains Resources in South Australia, saying the mining area was too close to the Woomera weapons testing ground.
Foo Choy Peng, an associate director of China research at UOB Kay Hian, said capping investment was a practical way of addressing domestic concerns that Australia might lose control of its resources to overseas firms.
“In cases of smaller miners and smaller deals, Australia may allow China to buy greater stakes since it is more difficult for them to get bank financing,” she said.
BOC International analyst Belle Chan noted a trend among mainland firms to go after small to medium-sized mining firms and projects in Australia. That followed Chinalco’s failed attempt earlier this year to double its stake in Rio Tinto to 18 per cent amid opposition from Australian politicians and Rio’s shareholders.
The review board had processed about 90 proposed Chinese investments valued at about A$34 billion in the past 18 months, Colmer said.
China was now probably the third-biggest foreign investor in Australia after the United States and Britain, he said.
William Bradley "Brad" Pitt[1] (born December 18, 1963) is an American actor and film producer. Pitt has received two Academy Award nominations and four Golden Globe Award nominations, winning one. He has been described as one of the world's most attractive men, a label for which he has received substantial media attention.
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Lara began his cricket career while at school in Fatima College. When he was 14, he played in the under-16 and First Divisions of national schoolboys' cricket. He amassed 745 runs in the schoolboys' league that year at an astounding average of 126.16 per innings. Immediately afterwards he was selected for the Trinidad national under-16 team.
clickhere to know more details about BRIAN LARA
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