Federal Treasury officer Joe Hockey has allowed Chinese firm Yanzhou Coal to take ownership of Australian miner Yancoal Australia. The approval comes less than two weeks after he blocked a foreign takeover of GrainCorp, according to ABC Rural.
Hockey said in a statement that he approved the deal to ensure that Yancoal remains viable. Yanzhou Coal will now be able to up its share in the Queensland-based miner from 70% to 100%, the report stated.
At present, Yancoal operates ten mining sites across Australia. In 2008, the Foreign Investment Review Board (FIRB) forced Chinese state-owned Yanzhou to reduce its ownership in Yancoal to 70%. The Chinese firm has told Hockey that reduced shares in the miner threatens its viability and affects its expansion plans, the report explained.
According to foreign ownership analyst Jeffrey Wilson, from Murdoch University, he is not surprised that the Treasurer approved the buyout, ABC rural reported.
Wilson said of the transaction, "Basically what Joe Hockey said is 'they've given us a commitment that they're going to advance these development programs, but Yanzhou has made that conditional on being able to takeover Yancoal and make it private. We want that investment, we want those jobs in regional areas, we'll let them have 100 per cent.'"
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