SWF Radar Australia

The Financial Times reports that, “Australia has insisted that it will not attempt to deter Chinese investment in its booming natural resources, in spite of domestic fears that foreign sovereign wealth funds could build stakes in mining companies.”

The Age reports that, “[Australian treasurer] Wayne Swan has signalled his readiness to block acquisitions of controlling stakes in Australian resource companies by Australia’s resource customers, a move that comes amid an unprecedented run of foreign investment applications from Chinese state-owned companies.”

The Australian writes that, “If [Australian treasurer] Wayne Swan is shutting down efforts to knit a 49.9 per cent ownership cap for state-owned Chinese companies wanting to invest here, he should probably get out and tell them.”

The Australian writes that, “There is… a real danger of repeating the mistakes of the 1970s, when Australia’s poor industrial relations performance encouraged Japanese steelmakers to fund the establishment of a competitive iron ore industry in Brazil. In short, if Australia does not welcome China’s money, China may look elsewhere, to our detriment.”

While Bloomberg reports that, “Sinosteel Corp., China’s second- largest iron ore trader, is seeking Australian approval to take a ‘substantial’ stake in Murchison Metals Ltd., which may allow it to control a A$3 billion ($2.9 billion) mining project,” Reuters reports that, “Chinese trader Sinosteel has made no approach to acquire Australian iron ore prospector Murchison Metals Ltd, a Sinosteel spokesman said on Thursday.”

Meanwhile, the Associated Press reports that the Australian government will decide within 90 days whether it approves of the takeover.

The Australian writes that, “The Rudd Government is understood to be preparing a new foreign investment regime that would limit state-owned [Chinese] corporations from taking technical control of Australian companies.”

The Sydney Morning Herald writes that, “Rio Tinto’s chief executive, Tom Albanese, has weighed into the debate over investment by foreign governments in Australia, saying the mining sector’s growth depends on foreign investors’ money.”

ABC News reports that, “[Australian] Federal Treasurer Wayne Swan says Chinese investment in Australia could rise dramatically and perhaps triple this year, promising a non-discriminatory approach to incoming funds.”

The Age reports that, “[Australian treasurer] Wayne Swan has warned China that applications for foreign investment would not be automatically approved, but tested to ensure the correct ‘market forces’ were maintained.”

The Sydney Morning Herald writes that, “Repeated delays in foreign investment approvals by the Federal Government are causing ‘significant and damaging misconceptions’ in Beijing, says a lawyer for Chinese state-owned companies.”