While other Chinese steel companies are being held up by extended Australian regulatory review, the Foreign Investment Review Board and Treasurer Wayne Swan cleared Hunan Valin Iron and Steel Group Co. Ltd. to become a major shareholder in Aussie iron ore miner Fortescue Metals Ltd.
Hunan could pay about A$1.3 billion ($894 million) for a stake that will be capped at near 17.5%.
Fortescue thinks the deal could pave the way for
for more investments from China. It's also looking for a
$3 billion investment from sovereign wealth fund China Investment Corp. Like its peers, Fortescue was stung by falling commodity prices and low demand.
Chinese companies are looking to take advantage, but they're having a tough time in Australia. On Tuesday, state-owned China Minmetals Corp. had to return with
a revised bid for Oz Minerals Ltd. after its A$2.6 billion bid for the mining company was blocked.
And as we previously noted, China's Anshan Iron & Steel Group Corp. was asked to resubmit its application to the FIRB to buy a $162 million stake in Gindalbie Metals. Chinalco
seems confident, though, even after a 90-day extension by the Treasury to review the deal. The Australian Competition and Consumer Commission said it
would not oppose a $19.5 billion deal where Aluminum Corp. of China would acquire assets and stock in Rio Tinto plc. -
Baz HiralalGo to the story
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