Huge coal deal: State supports bid in Australia | Shanghai Daily

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December 7, 2009

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Huge coal deal: State supports bid in Australia

CHINESE regulators have approved a massive bid by state-owned Yanzhou Coal Mining Co Ltd to take over Australian miner Felix Resources Ltd.

The multibillion-dollar deal is the largest approved for a Chinese firm to buy an Australia raw material provider.

China's fourth-largest coal producer by market value said in a statement to the Hong Kong Stock Exchange on Friday that the nation's top planner issued an approval letter on Thursday.

The National Development and Reform Commission backed the company's bid to take full control of Felix.

The two companies signed an agreement in August that Felix would be sold to Yanzhou Coal for US$3.2 billion at US$15.40 per share.

The Australian government granted conditional approval for the takeover in October.

Yanzhou Coal will operate the Australian miner through an Australian-incorporated and based company, Yancoal Australia Proprietary Ltd.

Yanzhou Coal, based in eastern China's Shandong Province, must list its Australian assets in Australia by the end of 2012 and by that time reduce its ownership to less than 70 percent, the Australian government said.

The majority of Yancoal's board meetings must be held in Australia, according to a statement by the Assistant Federal Treasurer in the country, Nick Sherry.

The Chinese firm said that after the takeover it would obtain approved coal reserves of 1.5 billion tons in Australia.

Coal production by Yanzhou Coal in the first three quarters this year amounted to 26.87 million tons.

In June, iron ore giant Rio Tinto rejected a US$19.5 billion investment offer from Aluminum Corp of China.

China's sovereign wealth fund, which held almost US$300 billion in assets at the end of last year, is also seeking acquisition chances in resources firms from Indonesia to Canada. The fund has spent more than US$4 billion since September to invest in resource sectors overseas.




 

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