China swoops on Australian miners

       Chinese state-owned firms expanded their footprint in Australia's mining industry yesterday, agreeing to help fund two iron ore explorers in return for supply contracts and taking a controlling stake in a uranium prospector.
       China, the world's third-largest economy, is leading the world out of the deepest global recession in 80 years,and its appetite for raw materials is as strong as ever, especially for Australian commodities such as iron ore.
       In two iron ore-related deals announced yesterday, China Railway Materials Commercial Corp forged separate alliances with explorers FerrAus and United Minerals, both operating in west Australia's vast Pilbara iron ore belt.
       In the third, China Guangdong Nuclear Power Holding Co Ltd agreed a takeover of uranium prospector Energy Metals .
       Another junior iron ore miner, Atlas Iron, revealed to Reuters that it, too,had held inconclusive talks with prospective Chinese investors, though managing director David Flanagan said Atlas did not need fresh equity right now.
       All foreign sovereign investments need Australian government approval, and the queue of Chinese state investments awaiting the government's go-ahead is lengthening by the day, all at a time of political tensions between Canberra and Beijing .
       In the next few weeks, the Australian government's secretive Foreign Investment Review Board is expected to rule on a Chinese state-owned firm's $400 million deal to take a majority stake in rare-earths company Lynas Corp's.
       That deal was announced back in May.
       China is swooping on Australian prospectors and miners at a time when they are hungry for new capital to dig new mines and build new rail lines and ports. Much of Australia's resources are in remote outback areas with little infrastructure.
       The deep pockets of China Railway Materials could help both FerrAus and United Minerals to develop their Pilbara deposits, including new rail and port facilities needed for it to export their ore from the eastern Pilbara.
       The United Minerals deal will help it develop its "Railway Iron Ore" deposit and is conditional on it supplying China Railway Materials with 3 million tonnes of ore a year for 10 years.
       "Funds from this capital raising and more importantly the relationship we are building with China Railway Materials Commercial Corp Group will enable the Railway Iron Ore Deposit to be advanced towards production," United Minerals chief executive Matthew Hogan said.
       China takes almost 80% of Australian iron ore exports by volume, up from around 20% at the start of the decade.
       Australian uranium is also a growing target for Chinese capital, with state and national governments now encouraging new uraniummines afters years of political hostility.
       China Guangdong Nuclear (CGNPC)agreed to buy up to 70% of Energy Metals.
       "The Energy Metals board believes that CGNPC's financial resources, technical expertise and strategic intent to develop its uranium resource portfolio,will greatly assist Energy Metals in its transition from explorer to developer and producer," chairman Oscar Aamodt said in a statement.
       Energy Metals'40% shareholder, Jindalee Resources Ltd, intended to accept the Chinese bid, in the absence of a superior offer, Energy Metals said.