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|Australian military rejects China’s investment|
|Sep 25, 2009 02:57|
|On Thursday, Australian Defence Department opposed a proposed joint venture between Wugang Australia Resources, a wholly owned unit of Chinese state-owned Wuhan Iron and Steel. The Chinese miner Wugang offered a $400 million bid for a stake in an outback mining venture in Woomera where the Woomera test range is located. Australian military claimed that is was totally out of national security concern and it had nothing to do with the Rio Tinto case. |
Meanwhile, China Nonferrous Metal Mining (Group) Co Ltd(CNMC) has also terminated its bid for Lynas Corp, owner of the world's largest undeveloped deposit of rare earths, citing stiff conditions imposed by Australia's Foreign Investment Review Board(FIRB). The board had demanded CNMC to cut its ownership to below 50 percent and take a clear minority of board seats in Lynas. On May 1st, CNMC made a deal with Lynas Corp to buy out 51.66% of Lynas Corp’ share. Both decisions come at a time of strained bilateral diplomatic ties between China and Australia.
|Sep 28, 2009 03:07|
Originally Posted by YVONNEAustralian military claimed that is was totally out of national security concern and it had nothing to do with the Rio Tinto case.
Do you believe it? Australian military' s move is retaliative. This won't do good to Australian mining industry.
|Sep 28, 2009 19:28|
|Yvonne, can you quote your source on this story?|
Sounds like a beat-up to me.
|Oct 3, 2009 20:05|
|The story is mostly correct Dodger however both deals were in fact takeovers, not joint ventures. The reasoning behind rejecting the Lynas deal is obvious. Lynas has discovered a large rare earth mine in Australia and needed capital to develop it. China presently has 95% of all the rare earth mines in the world and wanted to also own 51% of Lynas to control that as well. Once having total control they could demand much higher prices by limiting supply which would impede Australian manufacturers. Rare earths are a vital component of all modern equipment from cell phones to electric cars. Personally I am delighted by the decision and have bought Lynas shares as a consequence.|
The refusal of the Western Resources takeover bid is more complicated. I doubt the veracity of the military angle. The Foreign Investment Review Board has concerns that most large Chinese companies are in fact state funded and state controlled. Quite reasonably, and prudently in my opinion, the FIRB is not comfortable allowing the Chinese government (in the guise of a private company) takeover Australian publicly listed companies. It welcomes investment, but refuses to relinquish Australian control to a foreign power. Not an unreasonable nor unique position I would not have thought.
|Oct 4, 2009 04:19|
|Thanks for the clarification Bobert.|
Can you give us an update on the spy?
I can’t seem to find any news on the poor sod anywhere.
|Oct 4, 2009 18:12|
|The charges against Stern Hu have been downgraded from stealing state secrets to commercial espionage. The penalty if convicted (sorry,I mean WHEN convicted) is consequently reduced from life imprisonment to about 5 years. He is still being held incommunicado in prison and is still being denied any legal representation. No evidence whatsoever has yet been produced. He is still not allowed visits from family or friends although he is allowed one consular visit per fortnight. No trial date has yet been set.|
You might find this story interesting Dodger
|Oct 4, 2009 18:25|
|More than 50% ownership will take the control over the board of directors that would enable China take over operational and executive powera, which is definitely unacceptable to Australia, besides mining industry is a nation's strategic business, Australia rejecting the bid is understandable. The same issue carry over to the unranium mining in Alberta, Canada where China, i heard, has portion of shares there, that more or less brings some employment advantage to the Chinese. As for taking over, i.e, is unacceptable either.|
|Oct 5, 2009 09:09|
|Bobert, thanks for the link in regards to the “spy”|
And judging from Marrie's last post I doubt that she is as myopic as she makes out to be.
|Oct 5, 2009 15:22|
|Marrie is not myopic. She is blind.|
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