Business as usual

Increasing levels of Chinese investment will not see operational change for Australian mining companies, Deloitte managing partner Keith Jones told MINING DAILY.

Increasing levels of Chinese investment will not see operational change for Australian mining companies, Deloitte managing partner Keith Jones told MINING DAILY.

“When it comes to major companies, I don’t think Chinese investment will make substantial differences in how they operate,” he said.

“The management of those organisations will be largely left alone.”

Voices of fear have been heard after recent deals in which Chinese state-owned Chinalco purchased up to 18% of Rio Tinto for $30 billion and Minmetals offered a $2.6 billion takeover of OZ Minerals.

Fortescue Metals also this week announced that it has held discussions about potential investment with China Investment Corp.

Fears have been that the government owned overseas companies will have major effects on the operational practices of the Australian companies, including both management and employment.

According to Jones, these fears are unfounded.

“I don’t see the operation risk or the employment risk,” he said.

“Most of the operations of these mining companies or other assets that are acquired will operate on a very similar basis to how they always have, and there will be no real change.”

The recent increase in Chinese concentration in the local market is a combination of the financial downturn and China’s long held interest in Australian investment, Jones said.

“China’s been looking at the Australian market and investing down here for several years, but most of the money has gone into new projects,” he said.

“We’re now seeing a combination of an interest that has been there for a number of years with an environment where there are no doubt a number of our mining companies that are in need of capital to either reduce liabilities or expand or maintain their projects.

“It’s a combination of the two factors.”

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