The increasing level of Chinese investment has created a heightened level of concern for those in the resources sector, yet the increased investment is not necessarily a bad thing, Deloitte managing partner Keith Jones told MINING DAILY.
“Australians just need to bear in mind that each of the major investments is subject to government approval and review to ensure the national interests are protected.”
Jones said there was no reason for Australians to hit the panic button just yet because in most cases, the companies involved in the transactions are determined to make a decision that is in the best interest of their shareholders.
“Chinese companies have been investing in the Australian shores for years, they were not the first people to invest and they certainly won’t be the last.
“The Chinese never anticipated their growth would be so large and even though we are currently suffering from what I would refer to as normal trend lines, they understand demand will surge again and they are ensuring they are prepared to meet supply for future demand.”
According to Jones everything comes back to supply and demand. He dismissed recent reports discussing the potential implementation of export licenses.
“I’d be surprised if licenses came into play because they would restrict more than help. What you don’t want to see is any off shore market with the capacity to control pricing,” he said.
“What we do want to see is fair prices negotiated between Australia and its Chinese counterparts. That is currently being done between Vale, Rio Tinto and Brazil. Often one makes a decision and the other two fall into place. However, at the end of the day, the final price is agreed on by all parties.”