17 China's unprecedented Australian resources grab

China's unprecedented Australian resources grab

China has no interest in buying cars from America, and not much interest in buying Treasury Bonds. What is wants to do with its surplus dollars, is buy assets - in particular, mines and oilfields.

Dropping tariffs has cost us not only own manufacturing industry, but, increasigly, our mining industry too.

(1) Australia's University student body says international student scams damage entire education sector
(2) Migration fraud 'rife' in overseas student scam
(3) Indian student industry a study in shams and scams
(4) China's unprecedented Australian resources grab
(5) Singapore and China buy up Australia
(6) FIRB approves Chinese firm taking slice of Kagara

(1) Australia's University student body says international student scams damage entire education sector

NUS slams international student scams

Posted July 14, 2009 11:28:00  Updated July 14, 2009 11:27:00

http://www.abc.net.au/news/stories/2009/07/14/2625300.htm

The National Union of Students says the standard of international student programs in Australia is bringing the nation's entire education sector into disrepute.

Newspaper reports are today alleging that corrupt overseas agents are charging students huge fees for enrolments, good test results, and even marriages to satisfy immigration laws.

NUS president David Barrow says the international student industry must be better regulated.

He says he has a raft of suggestions for Federal Education Minister Julia Gillard.

"The first one is going to be making sure that when she has her consultation it's not just a talkfest, but that there are actually real solutions," he said.

"The second thing will be getting some student representation in the international sector and the third thing will be dealing with safety concerns, accommodation concerns."

(2) Migration fraud 'rife' in overseas student scam

http://www.theage.com.au/national/migration-fraud-rife-in-overseas-student-scam-20090104-79v0.html

Chris JohnstonJanuary 5, 2009

UNREGISTERED migration agents selling black-market paperwork to international students are "con men and con women" operating undetected in Melbourne, according to the Migration Institute of Australia.

The institute has reported 60 cases of rogue agents.
Nine Melbourne businesses were raided last month.
Several people are likely to be charged over the raids.

Chief executive Maurene Horder said the shadowy "agents" offered fake documents for thousands of dollars to naive young Chinese and Indian students.

"It is rife," Ms Horder said. "These people are, in effect, trying to sell visas. Some of what goes on is pretty sinister."

The institute reported 60 rogue agents — from Melbourne, Sydney and Brisbane, detected from February 2007 — to Immigration Minister Chris Evans in May, she said. The institute controls registered agents; those unregistered or deregistered come under Immigration Department jurisdiction.

"The Howard government gave this a very low priority," Ms Horder said. "We are trying to get the new Government to act on it but so far we know of very little action."

A spokesman for Mr Evans said the 60 cases were being investigated.

Nine Melbourne businesses were raided and evidence was seized last month after a year-long probe by immigration officers and federal police into one of the largest alleged migration scams involving international students in Melbourne.

It will be alleged that students seeking permanent residence were charged up to $20,000 for fake education and work-experience certificates, and that a Chinese-owned business consultancy in Little Collins Street, Hong Yun International, was a front for an unregistered migration agency.

It will be alleged Hong Yun orchestrated the scam through a network of related businesses including a private training college for international students in Flinders Lane, a city Indian restaurant, graphic design studios and an education consultancy.

The scam has worked because international students need documents from the colleges they attend and employers with whom they do work experience before they can apply for permanent residency, which is often what they are most interested in. If the application is made with fake documents it is deemed migration fraud.

Several people are likely to be charged over the Hong Yun raids.

An Age investigation revealed last year that an Indian-run, private training college in Bourke Street allegedly charged about $3000 for fake certificates. It has also found that:

- A Chinese-owned company operating from the same building as Hong Yun International has allegedly advertised itself in a local Chinese newspaper as able to give migration advice, despite not having a migration agent registration number.

- A Chinese-born owner of a Queen Street trades college for international students, as well as several migration and education consultancies in the CBD, was suspended from being a migration agent for a year.

- A director of a Chinese-owned business with a migration agency subsidiary was sanctioned in 2000 for five breaches of the agents' code of conduct, including providing inaccurate migration advice.

(3) Indian student industry a study in shams and scams

http://www.theaustralian.news.com.au/story/0,25197,25778649-601,00.html

July 14, 2009 12:35pm AEST

Amanda Hodge, South Asia correspondent | July 14, 2009

AUSTRALIA'S lust for high-dollar Indian students has led to a thriving black market in sham marriages, forged English language exams and bogus courses, and turned a once-respected international education sector into a recognised immigration racket.

While the federal government and industry work to repair the damage caused by a recent spate of attacks on Indian students in Australia, education agents say the violence has shone a light on a $14 billion industry riven with corruption.

An investigation into the overseas student industry has found thousands of Indians each year are being enrolled in dodgy courses at inflated prices and sold unrealistic dreams of cheap living and plentiful jobs.

The Australian has found operators across the Punjab, the main feeder community for Indian students in Australia, openly advertising "contract marriages" for aspiring immigrants to partners who have passed the mandatory English test for a student visa.

For an additional fee, agents will arrange bank documents and loans to satisfy Australian immigration law that demands students have the means to support themselves for the duration of their course.

Industry insiders say a flourishing market has also developed around the International English Language Test System, with students paying anything up to $20,000 for a good result.

Sonya Singh, a respected Indian education agent servicing the Australian market, says the myriad scams offered to foreign students each year have made "Australia a supermarket where people are buying stuff off the shelf".

"A good-quality Indian student notices a completely no-good student on the same flight as him to Australia and starts to wonder where he's going," she said. "Indians are so conscious of branding and Australia's reputation has suffered a lot because of the recruitment process.

"My own kids didn't want to study in Australia because they had a perception that poor-quality students go there and that if they told their friends they were going to Australia, they would be laughed at or thought of as lesser."

Corruption is now so rife among India-based education agents that Ms Singh says she has had to institute a new policy across all 24 of her agencies in India and Australia. "The first thing they must tell every student that walks through the door is 'We don't arrange funds and we don't arrange marriages'," shesaid.

"In Melbourne, we get lots of requests to arrange IELTS scores and work-experience permits (to satisfy new requirements that a student must have completed 900 hours of work before being granted permanent residency)."

Last week, police arrested three people in the Punjab city of Ludhiana for impersonation and forgery after they were found to be sitting the IELTS exam for aspiring foreign students.

A police spokesman told local media the scam was an "organised racket" and further arrests were expected.

Foreign students and a voracious Indian media have reacted angrily to the recent attacks, prompting government and industry to announce legislative reviews, investigations into student welfare and a 10-point plan to reform the sector.

A delegation of government, police and education officials will tomorrow) conclude an eight-city tour of India designed to assure agents, parents and an Indian government made nervous by intense domestic media coverage that everything possible is being done to ensure the safety of foreign students.

However, Ms Singh says the root cause of student tension is not the attacks but a deep disconnect between the life they were told would be theirs and the debt, loneliness and disenchantment they find is the reality.

Fifty-one foreign students committed suicide in Australia last year, a fair proportion of them Indians whose families had sold land and taken on huge loans in the hope their child's success would repay in multiples.

Robert Palmer, who runs the Overseas Students Support Network in Melbourne, says supplying students to Australia has become a gold mine for education agents.

While universities and TAFEs pay about 25 per cent commission on first semester fees, equivalent to about $1200-$1500 per student, private institutes will pay up to 30 per cent of the entire course fee, providing a clear financial incentive for agents to channel students their way, and even into courses in which they have no interest.

And there is no shortage of willing students. The Australian approached six young men on the streets of Jalandhar, three of whom said they aimed to be studying in Australia by the end of the year. Among them was Jaspreet Badhan, who said he hoped to get permanent residency in Australia after studying hotel management. He added that many of his friends were hoping to study overseas.

Harmeet Pental, South Asia director of the Australian university-owned IDP Education agency, believes the problem lies with Australia's immigration processes. "The US interviews every single student going there -- whether it's for two or five minutes -- and then makes a call on their fitness," he said. "For Australia, agents have a list of skill sets given by the high commission and of the documentation required. That's it. The process is driving the behaviour."

Ms Singh says the Australian government policy of giving priority visa consideration to students who train in fields listed on the Critical Skills Shortage register has turned "genuine" students away.

"Every time a new (critical skills) list comes out, education providers start introducing those courses."

But Colin Walters, the federal Education Department official leading the Australian delegation in India, says that should change following the Indian government's decision last week to regulate the agent industry.

"The sector has grown very rapidly and there are some criticisms about some providers, so we need a vigorous audit system so their outcomes can be carefully scrutinised," he said.

Your Comments:

26 Comment(s)

skm of sydney 12:30pm today

Most of the students coming over to Australia are not really coming here for education. This is just a pathway to a possible permanent residency. Delink this and then see the number of students drop.

Andrew K of Melbourne 12:11pm today

Absolutely disgusting. Time that the permanent residency component was removed from education courses, and I will be looking to vote for political parties who make these immigration/education reforms part of their policies. Genuine students should always be welcomed to Australia, but those seeking a backdoor to the immigration process should be politely shown out the front door. The primary goal of Australia's education system should be to educate, not to fleece unsuspecting students and dud ordinary Australians.

Yogi of Sydney 11:50am today

I think the root cause of the problem is poor average students in India who have no hope of prosperity in Indian due to intense competition back home are inevitably falling pray to expectation of better quality of life in Australia. Stringent controls around screeing student visa applications & permanant residency and also instigating more decipline on education providers could ease the problem to some extend.The responsibility cast on both sides.Blame game on each other won't help to solve the problem.

Lecturer of Perth 11:38am today

@Graduate of Brisbane - Very true. I've been explicitly told to remark assignments and exams from international students so that they "pass". There was no demand to remark any of the work of the domestic students who failed. It happens. The whole situation is very messy, the number of international students who are being allowed into university degrees with vastly sub-standard English and subject specific prerequisite knowledge is getting worse. Sadly I have no idea how this can practically be solved, but something does need to be done soon.

Industry worker of Brisbane 11:28am today

It's not only the Indian agents that tell prospective students that life in Australia is easy, cheap and affordable. Students from south east Asia and South America often comment that agents "oversell" the lifetyle and affordability aspect reulting in honest studetns struggling to survive as they study in Australia. As for IELTS,( the International English Language Testing System) , it has become a huge business enterprise and a virtual monopoly in itself. As the article pointed out, it is open to potential abuse and corruption and stories abound in this country to this effect. There is insufficient monitoring and regulation in the industry surrounding the education of overseas students, which Austrade claims is Australia's third largest export industry and in some states of Australia, the largest export industry.

EGK of Sydney 11:22am today

Has anyone actually looked into the situation with mainland Chinese students? The situation there is probably even worse than the one described in India. I - being from the UK myself- have done two degrees - law and accounting- myself as an international students and was shocked by the level of language skills most of my fellow international students had - in particular the Indian and Chinese ones. They appearantly had passes their English tests on paper but I had serious doubts whether they actually had taken these test themselves. Most of them were unable to follow discussions in class and had difficulties following the lecture. Having said that they still managed to pass most subjects at university - often in supplementary exams and one must question whether there is a degree for cash culture amongst Australian universities. From my personal experience the corruption does not start and end with the agents. There is probably a much wider problem than one might want to admit.

LJM of Perth 11:18am today

Lets channel our resources and efforts into fixing our educational institutions. I understand that a sizable part of universities incomes come from overseas students but shouldn't our first priority be increase the number of Australian citizens who are well educated at a primary and secondary level and are demanding tertiary education. This would decrease the universities ability to be bribed into allowing less qualified applicants from overseas. Maybe the universities million dollar surplus's should be redirected into a struggling public education system...

Richard of Peakhurst 11:03am today

It is a scam no doubt. But can we blame them when the universities are under funded? Necessity being the mother of invention, they went for those that are desperate to emigrate to Australia. When the Indian "students" protested, it was a mean to pressure the government into giving them permanent residency and at the same time, to placate the Indian govt who works in tandem with their local electorates.

BROWSER 10:56am today

DAN OF MELBOURNE: You are absolutely spot on! This country needs a damn good clean-up. Australia's immigration system stinks. It is unfair, poorly regulated and is setting Australia up for massive problems in the not-too-distant-future. I think ALL immigration agents should be banned. It is time for the government to become responsible for the mess it has created.

Roshan of Melbourne 10:45am today

I am aussie born, but my family came from India. The calibre of students who come here to study from India is shocking. Most of them are the ones who never got into a university back there and have no desire to study but only come here for residency/PR purposes. But the education sector here welcomes them with open arms because they lots of money from them. Its about time the govt stepped in and stopped this. We should be getting quality international students not quantity. At most our universities should only have 15% international students not 50% like it is now. Only by raising the entry standards and strict monitoring can we ensure that the students who come here come for the right reasons ie education and not because they want an easy way to immigrate.
krul 10:32am today

I can't believe they needed an investigation into the industry to find out common knowledge - anybody know who else in the world gives residency to anyone who can bribe their way through a dodgy certificate or 'degree'? We ask for it, now we have the problem of sorting through applicants for jobs supposedly with degrees who are incapable of doing the work. We are rapidly turning ourselves into a third world country for quick cash.

Graduate of Brisbane 10:20am today

It must be difficult for our top universities to fail overseas students on whose income they increasingly reply.

Little tommy tucker of melbourne 10:08am today

Stop the application for visas onshore. Make it manddatory for all students to return to their own country and then apply for permanent residency. Then watch all your troubles evaporate

Dan of Melbourne 8:36am today

Is anybody surprised?! This country is becoming as corrupt as any other. The "agents" operating in this area are no better than the people smugglers who put their "clients" into leaky boats. And what is any damn politician going to do about it? Oh, but don't worry yourselves about it. This is the Lucky Country! It's all good. Just visit a shrine to a sports god, drink more beer, buy something, buy a bet on a lotto ticket! The only sure bet, is that this country has less and less to be proud of. And this latest scam is just another example that proves it.
JustinH of Brisbane 8:31am today

In any growth market, there will be those (on both sides) who will try and take advantage of the situation. In this case, it seems there are many agents who are attempting to profiteer on the the back of the boom, by fair means and foul. I would recommend to any student that they check the bona fides of the school first. Ensure that they ARE an RTO (Registered Training Organisation) and that the agent has full authority to act. Some due diligence can solve a lot of heartache in the long run.

Jingle Bells Curve 8:13am today

So universities and TAFE colleges are now buying fee paying students. I guess that's why the Vice Chancellors get paid the million dollar salaries now. If the universities and state government owned TAFE colleges have so much cash to burn how about they spend the ill gotten gains on housing for their fee paying students instead of delegating that responsibility to a private housing market bursting at the seams.

Glenno of Canterbury 8:12am today

Interesting that the suggestion in the article is that it is the behaviour of recruitment agents in India that is leading to the trashing of Australia's image as a high quality education provider. It seems to me that Australia has provided the perfect opportunity for this to occur. Linking education in Australia to the granting of permanent residency was always going to have the potential to corrupt our education system. this is especially so when cash strapped public education providers and private operators were able to generate large cash flows from overseas students. Couple this with a slow moving under staffed, under skilled regulator (in Victoria) administering rules that, at times, seem at odds with good education practice and outcomes and you have a recipe for disaster. Fixing up the problems is going to be very messy!

(4) China's unprecedented Australian resources grab

Wednesday, 30 April 2008

Stephen Mayne writes:

http://www.crikey.com.au/2008/04/30/chinas-unprecedented-australian-resources-grab/

Forget about the torch relay, the biggest issue Australia has with China right now is the Communist country's extraordinary land grab for our already largely foreign owned resources dowry.

The Australian's national affairs correspondent Jennifer Hewett might be costing News Ltd more than $200,000 a year, but she's been worth that fat wage in recent days with her ground-breaking coverage on the Foreign Investment Review Board's push-back against Chinese Government raids on more Australian resource stocks.

The Australian was right to splash with the story on ANZAC Day but Hewett's coverage has since surprisingly been relegated to the business pages.

As a foreign-controlled company with continuing Chinese aspirations, News Corp has never unleashed its media might on the world's biggest totalitarian regime, so don't hold your breath for The Daily Telegraph to splash with “Reds under every bed”, even though the current circumstances do warrant some rigorous public debate.

Let's be clear about what we are facing here: the Chinese Government has launched a co-ordinated strategy to buy up as much of Australia's strategic resources as possible.

The following extraordinary shopping list is BEFORE the revelation that another dozen Chinese applications are currently before the FIRB:

   March 2007: Shougang Corp steel group spent $56 million buying 13% or iron ore developer Australian Resources and agreed to fund $US2.1 billion development of the Balmoral South project;

   July 2007: CITIC spent $113 million lifting its stake in Macarthur Coal from 11.6% to 19.9%;

   September 2007: Queensland government awards Chalco rights to develop $3 billion bauxite project near Aurukun;

   September 2007: Anshan Iron & Steel paid $39 million for 13% of Gindalbie Metals and signed $1.8 billion joint venture deal to fund Karara iron ore project in WA;

   January 2008: consortium of five Chinese companies given FIRB approval to fund $3 billion Oakajee port and rail project in WA;

   January 31, 2008: Shougang Corp spent $400 million buying another 20% of WA iron ore company Mt Gibson Iron, but has since been forced to sell for breaching takeover rules;

   January 25, 2008: Sinosteel spent $100 million for more than 10% of WA iron ore hopeful Midwest Corp;

   February 3, 2008: Chinalco spent $15.5 billion for 9% of Rio Tinto shares in London;

   February 26, 2008: China Metallurgical Group announces proposed $400 million acquisition of Cape Lambert Iron's namesake WA project. CMG already owns 20% of nearby $5 billion Sino Iron Project;

   April 28, 2008: FIRB approves China Petrochemical Corporation paying $600 million for 60% control of the Puffin oil field in the Timor Sea, the first time a foreign government has operated an Australian oil field;

   April 29, 2008: Midwest board recommends agreed $1.36 billion bid from Sinosteel priced at $6.38 a share.

When you add all this up, Chinese Government backed companies have signed deals to spend more than $20 billion on companies with a majority of their assets in Australia and in the process have bought the rights to spend another $15 billion-plus directly developing additional projects.

Add in the wave of applications that FIRB is stalling, the stand-off over iron ore contracts, the rejection of spot price shipments and BHP's takeover bid for Rio Tinto and our Mandarin speaking prime minister finds himself in a very tough spot. How about a policy of no more Chinese takeovers unless Australian investors can do likewise in China?

Check out the full list of foreign government investments in Australia and listen to yesterday's discussion with Lindy Burns on 774 ABC Melbourne.

(5) Singapore and China buy up Australia

Foreign government investments in Australia

By Stephen Mayne

May 18, 2009

http://www.maynereport.com/articles/2008/02/15-2200-9287.html

With the Chinese Government wanting to inject $30 billion into Rio Tinto, the debate is on about foreign government investment in Australia. This list tracks major sovereign investments in Australia, demonstrating how both Singapore and China are set to own more Australian business assets than our own government.

Major Chinese Government investments in Australia

Chinalco spent $15.5 billion for 9% of Rio Tinto shares in London on February 3, 2008.

China Iron & Steel: The Rio Tinto-operated Channar iron-ore mine in the Pilbara has a capacity of 10mtpa and is 40% owned by China Iron and Steel, an investment worth well over $2 billion.

China Petrochemical Corporation: China's biggest energy distributor secured 60% and control of the Puffin oil field in the Timor Sea from the struggling AED Oil in 2008. The deal values the assets at $1 billion.

CNOOC: holds a 25% share in China LNG, a new joint venture within the existing $19 billion North West Shelf structure that diluted the other six joint venture parties down to 12.5% each.

Shanghai Baosteel Group: owns 46% of the Rio Tinto-operated Eastern Range iron ore mine in Pilbara which produces 6.5 million tonnes a year worth more than $500 million a year. Chinese investment now worth more than $1 billion.

CITIC: paid more than $400 for its 22.5% stake in the Portland Aluminium Smelter in the 1990s.

Shougang Corp: spent $400 million buying 20% of WA iron ore company Mt Gibson Iron in early 2008 and then teamed up with fellow Chinese investors APAC as part of an emergency $162 million capital raising in January 2009 that left Shougang with 14.34% and APAC with 28%.

Sinosteel: completed a $1.37 billion takeover of WA iron ore hopeful Midwest Corp after a 2008 takeover bid pitched at $6.37 a share. Would like to buy neighboring Murchison Metals, but FIRB has limited it to a maximum 49%.

CITIC: spent $113 million in July 2007 lifting stake in Macarthur Coal stake from 11.6% to 19.9% but is now losing on the investment after the resources bubble burst.

Consortium: five Chinese companies were given FIRB approval in January 2008 to develop the $3.5 billion Oakajee port and rail project in WA and then former WA Premier Alan Carpenter announced the winning tenderer in August 2008, but construction hasn't started yet.

Chalco: in September 2007 Queensland government awards rights to develop $3 billion bauxite project near Aurukun, which Noel Pearson has claimed includes an unfair forced land grab. This is now in doubt as Chinalco will be keen to focus its attention on expanding Rio Tinto's Queensland bauxite operations at Weipa.

Anshan Iron & Steel: paid $39 million in September 2007 for 13% of iron ore miner Gindalbie and signed $1.8 billion joint venture deal to develop the Karara Iron Ore project in Western Australia. Backed this up with a $162 million placement at 85c a share to Ansteel in February 2009 which increased its stake to 36.3%.

Shougang Corp: China's fourth biggest steel group spent $56 million in March 2007 buying 13% or iron ore developer Australian Resources and has an option to inject a further $42 million. Shougang has also agreed to fund the $US2.1 billion development of the Balmoral South mine and port project in WA thorugh an interest free loan and also buy the entire output.

China Metallurgical Group: paid $400 million for the Cape Lambert Iron ore project in WA in 2008, which is now in doubt given that China has secured its supplies through Rio Tinto.

China Nonferrous Metal Mining Co (CNMC): secured a 51.66% shareholding for $252 million of Sydney-based rare earths company Lynas. CNMC also provided a corporate guarantee to a Chinese Bank to raise another $253m, which brings the cost of transaction to $505 million.

Resource Development International: Gold Coast-based Clive Palmer who still claims to be worth more than $5 billion was hoping to raise more than $1 billion from Chinese investors through a float of this iron ore venture that is still to get off the ground.

Zhongjin: China's third largest zinc producer paid $45 million to take control of Broken Hill-based Perilya in early 2009.

Singapore Government investments in Australia

1995: Singapore government body, Capita Land, buys controlling stake in property developer Australand which is now worth more than $1 billion.

June 2000: Singapore Power, which is fully owned by the state, buys Victoria's monopoly electricity transmission business Powernet for $2.1 billion.

2001: Singtel, which is majority owned by the state, pays $14 billion, much of in shares, for Optus.

April 2004: Singapore Power paid $5.1 billion for TXU's Australian energy portfolio in April 2004, although $2.2 billion of retail and generation assets were on-sold to China Light & Power in March 2005. Late in 2005, 49 per cent of the remaining Australian power assets were floated in a vehicle called SP Ausnet, raising $1.3 billion.

2007: Singapore Power pays $4.5 billion in cash to Alinta shareholders to become the monopoly gas distributor in NSW and the largest distributor of electricity in Victoria.

May 2007: Singapore sovereign fund, the GIC, pays $717 million for a 50% stake in Westfield Parramatta, Australia's third-most valuable shopping centre.

June 2007: the GIC teamed up with the Commonwealth Bank and the Myer family to pay $600 million for the prestigious Myer Melbourne complex.

June 2007: Temasek Holdings paid $401 million or an excessive $7.30 a share for 12% of ABC Learning to become the largest shareholder in the world's biggest childcare company.

August 2007: Cityspring Infrastructure, which is backed by Temasek, paid a hefty $1.2 billion for the Basslink electricity cable linking the Victorian and Tasmanian grids.

August 2008: Temasek helped save Australia's biggest office tower investor by underwriting part of an emergency $1.6 billion capital raising that left it with almost 20%.

The Middle East

Dubai World, a holding company owned by the government of Dubai in the United Arab Emirates bought P&O in March 2006 for $US7 billion, giving it a half share in Australia's lucrative stevodoring duopoly.

Sheik Mohammed: the ruler of Dubai splashes $460 million buying the thoroughbred, training and bloodstock operations controlled the Ingham family.

Kuwait Government: owns 50% of Australia's tallest office tower, the Rialto, through the St Martins property business which also controls three buildings in Perth's St George's Terrace.

Rest of the World

UK: The government-underwritten BBC bought control of Australia's iconic travel publishing business Lonely Planet in July 2007.

Canada: the Canadian Pension Plan now owns 15% of tollroad giant Transurban after a recent placement to reduce debt.

Netherlands: The Dutch government and eduction sector pension fundand, Stichting Pensionefonds ABP, which controls about $350 billion in assets, bought 40% of Goldfields House at Circular Quy in Sydney from the struggling Valad Property Group.

Additionally, here are lists of foreign companies generating more than $200m, and Australia's improving foreign ownership record.

Check out all the Mayne Report business lists here. Go here to see the full comprehensive list of lists we've created documenting the dominance of foreign investors in Australia and our relative poor performance on the international business stage. Anyone who emails through 5 corrections or additions to stephen@maynereport.com will get a free three month subscription.
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(6) FIRB approves Chinese firm taking slice of Kagara

July 09, 2009
Article from:  Australian Associated Press

http://www.theaustralian.news.com.au/business/story/0,,25756212-5005200,00.html?from=public_rss

THE Australian government has given the nod to a Chinese party becoming the largest shareholder of debt-laden zinc and copper miner Kagara.

The approval by the Foreign Investment Review Board today clears the way for state-owned Guangdong Foreign Trade Group to take a 19.9 per cent stake in the miner .

Guangdong will initially invest $57 million at 60c per share through an entitlement offer shortfall and a placement for a 15 per cent interest.

It is also entitled, subject to Kagara shareholder approval, to increase its equity to 19.9 per cent by subscribing for additional, new shares in the company at 80c a share by August 10.

Guangdong will be entitled to appoint one representative to Kagara's board.

"The proposed investment will allow Kagara to significantly reduce its debt and enhance its future funding flexibility," the Perth-based company said in a statement.

Kagara recently raised more than $150 million through a rights issue, which was less than the $262 million it said last month was its target.

Kagara had substantial debt and only $2.7 million cash on hand at the end of March, and has been hampered by lower base metals prices and copper hedging contracts.

According to recent reports from China, Guangdong's expansion plans over the next three years include listing five companies and increasing its focus on hardware and building materials, mining and metallurgy, and chemical products.

Its investment in Kagara is its first in Australia and representatives will visit Perth shortly for a signing ceremony with Kagara.