China Non-Ferrous Metal Mining (Group) Co. was blocked by Australia from buying a majority stake in rare-earth producer Lynas Corp. as the government seeks to preserve local control of the nation’s resources.
Australia’s Foreign Investment Review Board ordered China Non-Ferrous to limit its stake in Lynas to less than 50 percent, the Sydney-based company said today in a statement. China accounts for more than 90 percent of global output of rare earths, used in iPod music players, liquid crystal displays, hybrid cars and wind turbines.
Investments by Chinese companies have faced scrutiny from Australia as the biggest metals consumer accelerates takeovers. Australia blocked a A$2.6 billion ($2.3 billion) bid by state- owned China Minmetals Corp. for OZ Minerals Ltd. in March on national-security concern and review board director Patrick Colmer said today overseas investors should limit proposed stakes in major mining companies to no more than 15 percent.
“What FIRB doesn’t want to see is something as significant as a rare-earths project, where China controls so much of the world’s production, fall under the control of one country,” said Peter Strachan, a Perth-based analyst for independent company StockAnalysis.
Lynas, which says it owns the world’s richest deposit of rare earths, has risen more than threefold since China Non- Ferrous agreed May 1 to pay A$252 million for a 51.6 percent stake. It advanced 3.5 percent today in Sydney trading to 90 cents....MORE
And from Reuters, our old pal*, Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co trades limit up in Shanghai:
China's CIC may launch domestic rare earth company
China's sovereign wealth fund, fresh from a series of investments in the global commodities sector, may launch its own domestic rare earth firm, a banking source and newspaper report said on Thursday.
China Investment Corp (CIC) could do so through Jianyin Investment, its wholly-owned domestic industrial investment arm, said the source, who is familiar with CIC. The $298 billion sovereign wealth fund's primary focus is on foreign investments.
Rare earths are metals used in high-tech devices and green products. For a factbox, click on [ID:nSYD28850].
CIC and Jianyin are talking with Baotou Steel (600010.SS) and the government of Baotou city in Inner Mongolia about setting up a rare earth company, state-run Economic Information Daily said.
"The talks are in a framework under which the two parties would set up a multi-billion yuan company to specialise in rare earth exploration and stock building," the paper cited an unnamed source with knowledge of the issue as saying.
"It will also help restructure Inner Mongolia's rare earth mining industry and CIC will hold a more than 80 percent stake," the source told the paper.
Shares of Inner Mongolia Baotou Steel Rare-Earth Hi-Tech (600111.SS) soared by the daily limit of 10 percent on the news. The company said in a statement to the Shanghai stock exchange that it had met with CIC officials earlier this month to discuss cooperation, but that no agreement had been reached yet....MORE