buying up chinnese will have to wait, page-12

From Saturday's West Australian Business section:

FMG sees hope for China cash

28th March 2009, 6:00 WST



Fortescue Metals Group was last night confident of winning Foreign Investment Review Board approval for a $644.8 million cash injection from Hunan Valin Iron and Steel despite the regulator’s decision to block the OZ Minerals takeover.

Although FIRB and Federal Treasurer Wayne Swan are yet to inform Fortescue of a ruling, it is understood the board is close to concluding that Valin’s injection, part of a deal to acquire a 17.4 per cent stake in the iron ore miner, was not against the national interest.

The regulator said it would rule by April 24, although an announcement could be made as early as next week.

There were concerns FIRB would not rule on applications involving Chinese Government-controlled entities until it had made a decision on Chinalco’s $US19.5 billion ($27.7 billion) plan to invest in Rio Tinto.

But the decision to block Minmetals’ bid for OZ yesterday has raised hopes that rulings on other Chinese proposals like Valin’s and AnSteel’s $162 million investment in Gindalbie Metals are imminent.

However, the OZ ruling has also sparked fears of a Federal crackdown on Chinese investment proposals, unless they relate to minority equity stakes or small assets not deemed significant on a national level.

PETER KLINGER