Minmetals says Chinese investment okay

28 Aug 2012, 6:11 pm   -   Source: AAP

The head of Minmetals Resources says Australians had no reason to worry about Chinese companies investing in Australia.

The head of Chinese state-owned Minmetals Resources says Australians have no reason to worry about Chinese companies investing in the economy, so long as they had credible management.

Andrew Michelmore said Minmetals Resources had a management structure that was accountable and complied with more onerous disclosure restrictions than Australian entities through its Hong Kong listing.

"If you look at an SOE (state-owned enterprise), you ask if they get an independent tick off.

"Who makes the decisions? Is there a proper board? Is there a management structure and reporting?" Mr Michelmore told reporters.

"I think if those structures are in place then you shouldn't have a worry who the party is."

Minmetals Resources, which mines copper, lead and zinc in Queensland, Tasmania and Western Australia, has been renamed MMG.

"If we sell anything to (Chinese parent company) MinMet, then we need independent shareholder approval for that, too," Mr Michelmore said.

"You get a blanket for a certain number of tonnes, provided it is sold at market price at an LME (London Metal Exchange) arm's length basis."

Chinese firm Hanlong Mining's takeover bid for Australia's Sundance Resources has sparked concerns after Chinese regulators forced the company to lower its bid price.

Hanlong has been accused of using Chinese regulators as a `tool' to force a lower price.

Opposition Leader Tony Abbott recently said it would "rarely be in Australia's interest" to allow a foreign government to control an Australian business.

Chinese state-owned enterprises are increasingly investing in Australia's mineral, energy and agricultural sectors.

Mr Michelmore on Tuesday said the disclosure requirements in Hong Kong, (where Minmetals was also listed) showing related-party transactions, including the involvement of government companies, were stringent.

He also pointed out that China's State-owned Assets Supervision and Administration Commission and that country's banks were making it harder for SOEs to get funding and had raised the bar for return on investment requirements.

Mr Michelmore had experienced Australian anxiety about foreign investment first-hand, when Minmetals bought most of Oz Minerals' assets in 2009, but was blocked from buying the Prominent Hill gold and copper mine, near the Woomera prohibited area weapons testing range.

He told a Melbourne Mining Club lunch he was confident about China's continued growth despite recent suggestions the Australia's mining boom was over.

The Chinese government was committed to bringing another 600 million people into its middle class in the short term, raising annual incomes from $600-$700 a year to $2,200, he said.

That would involve a different but still healthy rate of growth, using more of commodities such as copper and zinc.

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube