Australian mining industry and China's resource needs complementary: Shanxi Donghui chair
BARRY FITZGERALD THE AUSTRALIAN NOVEMBER 25, 2013 12:00AM
LITTLE-KNOWN Chinese resources companies have snapped up more than $1 billion in Australian mining assets in recent months, with one of the buyers saying more investment could be expected as long as Canberra continues to recognise the mutual dependency between the two nations on resources supply and demand. Fresh from wrapping up his firms's $161 million takeover of the ASX-listed Queensland copper/gold producer Inova, Shanxi Donghui chairman Zhang Ya Ping told The Australian the mining industry and China's resources needs were "deeply complementary", with Australia needing China as much as China needs access to Australia's mineral wealth. But further excursions by Chinese interests in to the local industry -- which aside from the iron ore sector is under pressure from weaker prices and a lack of equity market support -- would depend on Australia continuing to welcome foreign investment. Mr Zhang said Shanxi Donghui's experience in the Inova takeover had been positive. Speaking through an interpreter, Mr Zhang said his company, a big coking coal producer in China, had been quite impressed with the foreign investment approvals process. "It was very speedy and user-friendly," Mr Zhang said. He said the company had "very large financial resources" and would be looking at expanding its interests in Australia. He said that Shanxi Donghui had been looking to diversify globally into metals, and the Australian mining market came with a backdrop of stable political and legal systems. Inova's key shareholder, the Rio Tinto-controlled and Canadian-listed Turquoise Hill, put the takeover beyond doubt when it accepted its 56 per cent shareholding on November 1. Mr Zhang said he looked forward to working with Inova's Australian management and its workforce to realise the "potential of its portfolio of world-class assets". "Shanxi Donghui has access to the financial resources to help management realise this potential," he said. Shanxi Donghui was jointly advised on the takeover by PwC and Sapphire International. Rio was also involved recently in another Chinese acquisition. It sold its 80 per cent stake in the Northparkes copper mine in NSW for $US820 million to China Molybdenum. To the northwest of what is now Shanxi's Donghui's Osborne copper/gold mine in north Queensland, Altona Mining is looking at selling all or part of its Little Eva copper/gold project, which it calls development-ready. Altona managing director Alistair Cowden said a growing number of little-known, mid-tier Chinese companies of the ilk of Shanxi Donghui were taking a shine to the region and had been in the Little Eva data room. - See more at: http://www.theaustralian.com.au/business/mining-energy/australian-mining-industry-and-chinas-resource-needs-complementary-shanxi-donghui-chair/story-e6frg9df-1226767359580#sthash.dFKrH9sh.dpuf
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