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Thread: Australian military rejects China’s investment
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[quote=BOBERT,377824]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.[/quote]
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