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By ALEX WILSONApril 2, 2008;
MELBOURNE, Australia -- In a setback for China's efforts to build ties with resource companies that can feed its economic growth, Australian regulators Tuesday blocked a Chinese steelmaker's attempts to buy nearly 20% of Mount Gibson Iron Ltd.
The Takeovers Panel ordered the purchase of shares in the iron-ore miner by Shougang Concord International Enterprise Co. to be canceled because the acquisition violates Australian law.
• The News: Australian regulators blocked a Chinese steelmaker's attempts to buy nearly 20% of Mount Gibson Iron.
• The Big Picture: It was a setback for China's efforts to build ties with resource companies that can feed its economic growth.
• The Background: Chinese steelmakers are looking for alternative suppliers to heavyweights Rio Tinto and BHP Billiton.
Chinese steelmakers are hoping to win access to new sources of iron ore as prices for the steelmaking component appear set to continue to rise. The companies are increasingly looking to alternative mining companies in Australia to ease their reliance on heavyweights Rio Tinto PLC and BHP Billiton Ltd.
China's Sinosteel Corp. has a hostile 1.2 billion Australian dollar (US$1.1 billion) bid on the table for iron-ore miner Midwest Corp., although that deal may fail in light of Australian investor opposition.
There is further pressure on Chinese steelmakers as annual iron-ore price talks have been extended beyond Monday's deadline while Rio Tinto and BHP push for a freight premium for their ore.
Shougang -- a unit of Chinese steelmaker Shougang Group -- struck a deal in January to buy a 19.73% stake in Mount Gibson from Russia's Gazmetal Holdings.
Mount Gibson then made an application to the Takeovers Panel on the basis that the purchase would breach Australian law because Shougang owns 18% of APAC Resources Ltd., which already has a 20.2% stake in Mount Gibson.
MELBOURNE, Australia -- In a setback for China's efforts to build ties with resource companies that can feed its economic growth, Australian regulators Tuesday blocked a Chinese steelmaker's attempts to buy nearly 20% of Mount Gibson Iron Ltd.
The Takeovers Panel ordered the purchase of shares in the iron-ore miner by Shougang Concord International Enterprise Co. to be canceled because the acquisition violates Australian law.
• The News: Australian regulators blocked a Chinese steelmaker's attempts to buy nearly 20% of Mount Gibson Iron.
• The Big Picture: It was a setback for China's efforts to build ties with resource companies that can feed its economic growth.
• The Background: Chinese steelmakers are looking for alternative suppliers to heavyweights Rio Tinto and BHP Billiton.
Chinese steelmakers are hoping to win access to new sources of iron ore as prices for the steelmaking component appear set to continue to rise. The companies are increasingly looking to alternative mining companies in Australia to ease their reliance on heavyweights Rio Tinto PLC and BHP Billiton Ltd.
China's Sinosteel Corp. has a hostile 1.2 billion Australian dollar (US$1.1 billion) bid on the table for iron-ore miner Midwest Corp., although that deal may fail in light of Australian investor opposition.
There is further pressure on Chinese steelmakers as annual iron-ore price talks have been extended beyond Monday's deadline while Rio Tinto and BHP push for a freight premium for their ore.
Shougang -- a unit of Chinese steelmaker Shougang Group -- struck a deal in January to buy a 19.73% stake in Mount Gibson from Russia's Gazmetal Holdings.
Mount Gibson then made an application to the Takeovers Panel on the basis that the purchase would breach Australian law because Shougang owns 18% of APAC Resources Ltd., which already has a 20.2% stake in Mount Gibson.
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