Federal Treasurer Joe Hockey has removed foreign investment conditions placed on the ownership of Yancoal Australia Limited.
The conditions were placed on Yanzhou Coal Mining Company, a Chinese state-owned enterprise, in 2009, including reducing its ownership in Yancoal, a Upper Hunter, NSW mine from 100 per cent to less than 70 per cent.
It also required its economic interest in Yancoal's former Felix Resources coal mining assets to be less than 50 per cent by the end of December 2013, and to reduce its economic interest in the Syntech Resources and Premier Coal mines to less than 70 per cent by December 31, 2014.
"Since those conditions were imposed, significant challenges have emerged for the Australian coal industry, including slowing demand, declining coal prices and a number of mine closures," Mr Hockey said in a statement on Wednesday.
He said while Yanzhou has made progress in meeting those conditions by reducing its stake in Yancoal to 78 per cent, it has sought his approval to have the conditions removed so it can maintain its existing stake.
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"Yanzhou has undertaken to continue to support Yancoal's ongoing operations in Australia, thereby maintaining its position as a major regional employer," Mr Hockey said.
"So long as Yanzhou continues to own at least 51 per cent of the shares of Yancoal, Yanzhou will ensure Yancoal continues to operate so that it remains solvent."
Yanzhou will also extend its existing loans to Yancoal if required, and will support Yancoal's plans to expand the Moolarben open cut mine.
