china fund in australian asset buy-up, page-4

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Print Matt Chambers | September 23, 2009
Article from: The Australian
CHINA'S $US300 billion ($343bn) sovereign wealth fund is planning to take a stake in Australian coal mines, infrastructure and other assets by paying almost $1bn for a 15 per cent interest in Hong Kong commodities group Noble Group.

Noble, founded and run by Englishman Richard Elman, said yesterday China Investment Corporation had agreed to buy 573 million Noble shares for $US850 million.

Noble recently fought off Whitehaven Coal to boost its stake in Gloucester Coal to 87.7per cent for $US388m.

Gloucester has mines in the Hunter Valley. The Hong Kong company also owns the Donaldson coal mine in NSW.

The CIC stake will come from the issue of 438 million new shares, representing 12.9 per cent of the company, and the sale of an extra 138 million shares owned by interests associated with Mr Elman.

The deal is conditional on definitive agreements being signed, and approvals from boards and the Singapore Exchange.

There was no suggestion from Noble that Australia's Foreign Investment Review Board would need to approve the deal.

As well as its share in Gloucester and the Donaldson mine, Noble owns a 30 per cent stake in Macarthur Coal's Middlemount coking coal project in Queensland, which is targeting first production next year.

It is also a member of the Newcastle Coal Infrastructure Group, which plans to boost capacity at Newcastle Port, and owns 26.45 per cent of Territory Resources.

Noble said the $US642m it would pocket from the placement would be used for general corporate purposes.

As well as Australian mining assets, Noble owns Brazilian and Indonesian iron ore and coal assets, a shipping business, agricultural processing assets in China and sugar cane and ethanol plants in Brazil.

CIC has been increasing its investment activity in recent months and is said to be veering away from investing in financial services after being burned by the global financial crisis.

Earlier this year, CIC paid $US1.5bn for a stake in Canadian miner Teck Cominco, and this month reportedly has been being close to buying a stake in a Mongolian iron ore mine for $US350bn.

CIC recently invested $500m in Goodman Group.

"The (Noble) placement was the result of extensive discussions between the two parties and underscores the expertise the Noble Group has developed in supply chain management and the distribution of commodities, particularly agricultural products," the company said yesterday.

TTY is nobles Iron Ore play in Aussie. Can only help.
RAB