Citing national security, Australia on Friday blocked one of several acquisitions China was seeking in the country’s vast natural resources sector, a move that could stoke concerns about rising protectionist tendencies around the globe.
The decision to block the purchase of Oz Minerals, a mining company, by the state-owned China Minmetals, coincides with a heated debate concerning a much larger investment that another Chinese metals company, Chinalco, is planning to make in the Anglo-Australian mining group Rio Tinto. It also comes two weeks after the Chinese antitrust authorities blocked a move by Coca-Cola to take over Huiyuan Juice Group, a Chinese juice manufacturer, for $2.4 billion — a decision that caused widespread concern about China’s attitude toward foreign takeovers of local companies.
Wayne Swan, the Australian treasurer, said Friday that he decided to block the Oz Minerals transaction because the company’s Prominent Hill gold and copper mine, its core asset, is situated near a sensitive defense facility. ‘‘The government has determined that Minmetals’ proposal for Oz Minerals cannot be approved if it includes Prominent Hill,’’ Mr. Swan said.
He added that discussions were continuing ‘‘in relation to Oz Minerals’ other businesses and assets, and the government is willing to consider alternative proposals relating to those other assets and businesses.’’ Andrew Michelmore, the Oz Minerals chief executive, said the company was in discussions with Minmetals about potential changes to the transaction and would make an announcement ‘‘as soon as possible.’’
Battered by falling earnings as the prices of raw materials have plunged, Oz Minerals and Rio urgently need the cash injections that the Chinese companies’ investments represent. Oz Minerals is due to repay more than $900 million in debt next week and must now renegotiate the deal or obtain a loan extension.
Analysts on Friday said it was unclear whether Minmetals would proceed with a deal without Oz Minerals’ core asset. In a statement issued in Australia, Minmetals said Friday that it wanted to continue talks. Whatever happens, the announcement Friday will fuel the intense debate about a rise in global protectionism, even if Canberra says its rejection was due to security concerns rather than business protectionism.
A recent flurry of bids for some of Australia’s most prized natural resource assets has caused public and political unease in the country, as well as, in the case of the proposed Chinalco transaction with Rio, angry protests from shareholders. At the same time, however, China is the main buyer of the natural resources that form the bedrock of the Australian economy, making the approval of such deals politically sensitive.
Chinalco, or Aluminum Corp. of China, as it is officially known, last month proposed investing $19.5 billion in Rio Tinto. That deal, being evaluated by the Australian antitrust authorities, would be Australia’s biggest foreign investment to date by a Chinese company and increase China’s leverage in pricing negotiations for iron ore from Rio’s mines.
The attempted Oz Minerals takeover, and a separate bid by the Chinese steel manufacturer Hunan Valin Iron for a 17.5 percent stake in Fortescue Metals Group, another Australian company, are much smaller — $1.7 billion, in the case of Oz Minerals. But all three transactions, each announced in the past few months, reveal China’s desire to take advantage of the recent drop in commodities prices to secure its hold over natural resources.
Fuente: IHT
The decision to block the purchase of Oz Minerals, a mining company, by the state-owned China Minmetals, coincides with a heated debate concerning a much larger investment that another Chinese metals company, Chinalco, is planning to make in the Anglo-Australian mining group Rio Tinto. It also comes two weeks after the Chinese antitrust authorities blocked a move by Coca-Cola to take over Huiyuan Juice Group, a Chinese juice manufacturer, for $2.4 billion — a decision that caused widespread concern about China’s attitude toward foreign takeovers of local companies.
Wayne Swan, the Australian treasurer, said Friday that he decided to block the Oz Minerals transaction because the company’s Prominent Hill gold and copper mine, its core asset, is situated near a sensitive defense facility. ‘‘The government has determined that Minmetals’ proposal for Oz Minerals cannot be approved if it includes Prominent Hill,’’ Mr. Swan said.
He added that discussions were continuing ‘‘in relation to Oz Minerals’ other businesses and assets, and the government is willing to consider alternative proposals relating to those other assets and businesses.’’ Andrew Michelmore, the Oz Minerals chief executive, said the company was in discussions with Minmetals about potential changes to the transaction and would make an announcement ‘‘as soon as possible.’’
Battered by falling earnings as the prices of raw materials have plunged, Oz Minerals and Rio urgently need the cash injections that the Chinese companies’ investments represent. Oz Minerals is due to repay more than $900 million in debt next week and must now renegotiate the deal or obtain a loan extension.
Analysts on Friday said it was unclear whether Minmetals would proceed with a deal without Oz Minerals’ core asset. In a statement issued in Australia, Minmetals said Friday that it wanted to continue talks. Whatever happens, the announcement Friday will fuel the intense debate about a rise in global protectionism, even if Canberra says its rejection was due to security concerns rather than business protectionism.
A recent flurry of bids for some of Australia’s most prized natural resource assets has caused public and political unease in the country, as well as, in the case of the proposed Chinalco transaction with Rio, angry protests from shareholders. At the same time, however, China is the main buyer of the natural resources that form the bedrock of the Australian economy, making the approval of such deals politically sensitive.
Chinalco, or Aluminum Corp. of China, as it is officially known, last month proposed investing $19.5 billion in Rio Tinto. That deal, being evaluated by the Australian antitrust authorities, would be Australia’s biggest foreign investment to date by a Chinese company and increase China’s leverage in pricing negotiations for iron ore from Rio’s mines.
The attempted Oz Minerals takeover, and a separate bid by the Chinese steel manufacturer Hunan Valin Iron for a 17.5 percent stake in Fortescue Metals Group, another Australian company, are much smaller — $1.7 billion, in the case of Oz Minerals. But all three transactions, each announced in the past few months, reveal China’s desire to take advantage of the recent drop in commodities prices to secure its hold over natural resources.
Fuente: IHT
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