Sinosteel Corporation's appetite for the Mid West region has been capped by the federal government, which granted the Chinese steelmaker up to a 49.9 per cent interest in Murchison Metals Ltd.
Sinosteel Corporation's appetite for the Mid West region has been capped by the federal government, which granted the Chinese steelmaker up to a 49.9 per cent interest in Murchison Metals Ltd.
Federal Treasurer Wayne Swan yesterday approved the Chinese company's application to acquire the interest in the iron ore miner, as 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 Western 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.
Below is Mr Swan's statement issued yesterday:
Today I approved an application by Sinosteel Corporation to acquire up to 49.9 per cent of Murchison Metals Ltd (Murchison) under the Foreign Acquisitions and Takeovers Act 1975.
Sinosteel had previously sought to acquire up to 100 per cent of Murchison, which was the subject of an Interim Order under the Act. Sinosteel withdrew that application.
There have been significant developments since the original application was made.
The Western Australian Government recently awarded rights to construct new port facilities at Oakajee to a joint venture between Murchison and Mitsubishi Corporation. It is also considering proposals to build new railway lines to link the iron ore deposits in the Mid-West region to the port.
Sinosteel has recently acquired more than 97 per cent of Midwest Corporation Limited (Midwest) which has iron ore deposits adjacent to Murchison's. 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.
The Mid-West region may ultimately become a significant new source of iron ore exports to the north Asian iron and steel markets. Murchison is an emerging iron ore miner with deposits in the region.
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.
This approach is consistent with the national interest principles we released in February and with the approach I have outlined previously, including in discussions with my Chinese counterparts.
The Government's objective is that development of our considerable natural resource endowment occurs in a manner that allows Australia to remain a reliable supplier in the future to all current and potential trading partners. This ensures the maximum development of our resources and a fair return to all of the Australian community.
