Aus denies China is favourite

Sydney - Australia on Monday denied singling out Chinese investors after imposing tough conditions on a breakthrough mining takeover following a series of failed deals.

Foreign Minister Stephen Smith, speaking after Yanzhou Coal's 3.5bn Australian dollar ($3.2bn) takeover of miner Felix Resources was cleared, said all foreign investors were treated alike.

"State-owned enterprises and sovereign wealth funds from all countries are treated in exactly the same way, as the Treasurer has made clear through the publication of the relevant Foreign Investment Review Board (Firb) guidelines," he said, in an address to the Australia National University's China Institute.

The Firb twice ordered Yanzhou to resubmit its bid before clearing it on Friday subject to operating the assets through a locally based company with a mainly Australian management and sales team.

Yanzhou will also have to float the company on the Sydney stock exchange by the end of 2012 and slash its stake in it to 70% by the time of listing.

Smith said Australia welcomed Chinese investment, which has totalled AUS$38bn since the current government took power in late 2007.

"Despite a contrary view sometimes being expressed in Australia, the facts tell a very positive story about Australia's welcoming policy and posture towards investment from China," he said.

"Since November 2007, the Australian government has approved over 100 investment proposals from China to acquire Australian businesses. Ninety-six were approved unconditionally."

Last month the Firb told Chinese investors it preferred a 50% cap on foreign ownership of new ventures and 15% in major producers, and urged them to pursue acquisitions in a less opaque and heavy-handed way.

China Non-Ferrous Metal Mining later dropped its bid for Lynas, while Wuhan Iron and Steel's attempt to gain access to a mining project on a missile range was rejected on national security grounds.

In June, mining giant Rio walked away from a $19.5bn cash injection from Chinalco, angering China's state media. Weeks later China detained a top executive and eventually charged him with industrial espionage.

- AFP