SYDNEY--Australia's Treasurer relaxed ownership restrictions
tied to one of China's biggest purchases of a resources company,
easing doubts about the new government's willingness to attract
foreign investment just weeks after it vetoed a U.S. bid for a
major grain exporter.
Treasurer Joe Hockey said Yanzhou Coal Mining Co. (YZC) no
longer needed to meet a Dec. 31 deadline for reducing its stake in
Yancoal Australia Ltd. (YAL.AU) below 70%, citing the downturn in
global coal prices. Yanzhou, which owns 78% of Yancoal Australia,
had made the commitment in 2009 to complete its 3.5 billion
Australian dollar (US$3.2 billion) takeover of Felix Resources
Ltd.
"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.
Australia's government has faced criticism about its openness to
foreign investment following Mr. Hockey's decision not to allow
U.S. agribusiness Archer Daniels Midland Co.'s (ADM) A$3 billion
takeover bid for GrainCorp Ltd. (GNC.AU) to proceed.
Australia has recently been struggling to maintain investment in
its mines, which are the biggest suppliers of coal to China. Rio
Tinto PLC (RIO), BHP Billiton Ltd. (BHP), and Peabody Energy Corp.
(BTU) have put some of their Australian coal assets up for sale as
the outlook for the sector dimmed.
As a state-owned company, Yanzhou has greater access to capital
than the Australian unit. This gives it more firepower to expand
existing mines in eastern Australia's New South Wales and
Queensland states or invest in new projects.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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