Chinese firms snap up Australian miners http://business.theage.com.au/business/chinese-firms-snap-up-australian-miners-20090908-ffae.html
Chinese state-owned firms are still focusing on Australian resources companies for strategic investments, as BHP Billiton and Rio Tinto's iron ore joint venture in the Pilbara takes off.
Western Australian iron ore junior FerrAus announced today it will sell 12 per cent of the company to China Railway Materials (CRM) for about $12.6 million.
It also emerged that China state-owned energy group CGNPC Uranium Resources hopes to acquire up to 70 per cent of Perth-based uranium explorer Energy Metals.
The bid values Energy Metals at at $119.46 million.
In a separate deal, CRM will also make a $27.2 million equity investment in WA-based iron ore and bauxite explorer United Minerals Corporation NL (UMC).
That agreement would involve the two parties entering into a long term iron ore offtake agreement covering three million tonnes of ore per annum for 10 years.
Last month, Chinese state-owned steel giant Baosteel invested up to $285.6 million in Perth-based Aquila Resources.
It is understood Chinese companies are seeking to invest in Australia's iron ore industry ahead of a proposed $US116 billion ($135.6 billion) iron ore joint venture in the Pilbara between BHP Billiton and Rio Tinto.
There are fears the joint venture could give the resource giants too much power in setting iron ore prices.
Managing director of iron ore junior miner Atlas Iron, David Flanagan, said he stopped counting the number of Chinese investment delegations visiting his company after it reached about 150.
"If you are an iron ore company, have iron in your name, or mention iron in any one of your announcements, you can guarantee that a Chinese group has been in the door and talked about investment,'' Mr Flanagan said.
UMC Price at posting:
$1.09 Sentiment: Hold Disclosure: Held
