i wonder what this means for axo

Govt approves Sinosteel's Murchison bid
Email Print Normal font Large font September 21, 2008 - 3:45PM

Federal Treasurer Wayne Swan approved Chinese steel making giant Sinosteel Corporation's application to acquire up to 49.9 per cent of West Australian iron ore miner Murchison Metals Ltd.

Government approval is required under the Foreign Acquisitions and Takeovers Act 1975.

Sinosteel recently acquired more than 97 per cent of Midwest Corporation Ltd which has iron ore deposits next to Murchison's, in the mid-west region of WA.

Midwest and Murchison have previously sought to merge their operations by takeover proposals that did not proceed.

"The government welcomes foreign investment in Australia, and I will continue to ensure that investments are consistent with Australia's national interest," Mr Swan said.

"In approving Sinosteel's application, I have determined that a shareholding of up to 49.9 per cent in Murchison will maintain diversity of ownership within the mid-west region.

"The government considers the development of such potentially significant new resource areas should occur through arrangements that are open to multiple investors."

Sinosteel had previously sought to acquire up to 100 per cent of Murchison but later withdrew that application.

Mr Swan said there had been significant developments since the original application was made.

The West Australian government recently awarded rights to construct new port facilities at Oakajee to a joint venture between Murchison and Mitsubishi Corporation.

It was also considering proposals to build new railway lines to link the iron ore deposits in the mid-west region to the port.

The mid-west region may become a potential significant new source of iron ore exports to the north Asia.

Mr Swan said the government's objective was to develop natural resources while maintaining Australia as a reliable supplier to all current and potential trading partners.

© 2008 AAP