China's efforts to expand in Australia's resources sector were given a substantial boost yesterday when Canberra approved Hunan Valin Iron and Steel's purchase of up to 17.55 per cent stake in Fortescue Metals, the country's third largest iron ore exporter.
There was optimism that China's Minmetals, which last week had its A$2.6bn (US$1.8bn) agreed takeover of Oz Minerals blocked, would strike a revised deal after the Chinese group submitted a new bid proposal that excluded the Prominent Hill mine cited by Canberra as the reason for rejecting the initial offer.
Both developments will add to confidence that Chinese entities are welcome to invest in Australia although Wayne Swan, Australia's treasurer, demanded “formal and strict undertakings” from Valin and Fortescue.