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Australia kills Chinese deal
September 25, 2009, Friday
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Print Edition
AUSTRALIA'S Defense Department vetoed Chinese investment in a proposed mine within an Outback missile testing range on security and safety grounds, the defense minister said yesterday.
The rejection of state-owned Wugang Australia Resources Pty Ltd's bid to buy half of the proposed Hawks Nest magnetite mine within the Woomera military range is the second time this year that Australia has blocked Chinese investment in the area.
In March, Australia blocked China Minmetals Nonferrous Metals Co from buying Australian miner Oz Minerals Ltd for A$2.6 billion (US$2.27 billion) on security grounds because one of the assets, the Prominent Hill gold and copper mine, was within the range precinct. China Minmetals eventually bought all of Oz Minerals apart from that mine for A$1.7 billion.
Australian mining companies have welcomed Chinese investors as falling commodity prices left some unable to pay their debts.
Australia's Defense Minister John Faulkner said that while other mines had been allowed within the so-called Woomera Prohibited Area, the problem with the Hawks Nest mine was that it was in the missile firing line.
The Defense Ministry informed Wugang's proposed Australian partner in the mine, Western Plains Resources Ltd, that the joint venture "would not be compatible with Defense's activities at the Woomera Prohibited Area on safety, operational and national security grounds."
Wugang, a subsidiary of Wuhan Iron and Steel Group Corp, would have bought 21.1 million Western Plains shares for A$45 million and a half share in the mine.
The rejection of state-owned Wugang Australia Resources Pty Ltd's bid to buy half of the proposed Hawks Nest magnetite mine within the Woomera military range is the second time this year that Australia has blocked Chinese investment in the area.
In March, Australia blocked China Minmetals Nonferrous Metals Co from buying Australian miner Oz Minerals Ltd for A$2.6 billion (US$2.27 billion) on security grounds because one of the assets, the Prominent Hill gold and copper mine, was within the range precinct. China Minmetals eventually bought all of Oz Minerals apart from that mine for A$1.7 billion.
Australian mining companies have welcomed Chinese investors as falling commodity prices left some unable to pay their debts.
Australia's Defense Minister John Faulkner said that while other mines had been allowed within the so-called Woomera Prohibited Area, the problem with the Hawks Nest mine was that it was in the missile firing line.
The Defense Ministry informed Wugang's proposed Australian partner in the mine, Western Plains Resources Ltd, that the joint venture "would not be compatible with Defense's activities at the Woomera Prohibited Area on safety, operational and national security grounds."
Wugang, a subsidiary of Wuhan Iron and Steel Group Corp, would have bought 21.1 million Western Plains shares for A$45 million and a half share in the mine.
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