Australia says Yanzhou Coal Mining can own 100pct in Yancoal Australia- report
A Bloomberg report said Australia has ruled that Yanzhou Coal Mining Co can move towards 100% ownership of Yancoal Australia. Yanzhou Coal Mining Co is a Chinese state-owned coal company and the fourth largest producer in China. It owns a 78% stake in local unit Yancoal.
In an emailed statement to Bloomberg, Treasurer Joe Hockey said that "significant challenges" have surfaced in the coal industry since 2009 when the ownership conditions were given as a condition for the takeover. He said, "The government has no in-principle objection to 100 percent foreign ownership of Australian companies where it is not contrary to the national interest and is open to any such proposals from Yanzhou in the future." Hockey said that slow demand, lower coal prices and various mine closures had plagued the coal industry.
The report said Yanzhou Coal received the approval of Australian regulators in 2009 to acquire Felix Resources Ltd in a deal worth AUD 3.3 billion or USD 3 billion under the condition that the assets would be listed in Australia and that it would lessen its stake to less than 70%. The conditions also gave Yanzhou the ability to get the approval of the Treasurer to change these conditions, according to Hockey.
In 2012, Yanzhou Coal purchased Gloucester Coal Ltd which it combined with Yancoal, Bloomberg reported. The merged company put Gloucester Coal's Sydney listing and trades at a market value of AUD 651 million. When the Gloucester Coal agreement was completed, Yanzhou Coal was then given until December 31 to lessen its holding in Yancoal.
Hockey said in the email, "In commitments provided to me, Yanzhou has undertaken to continue to support Yancoal's ongoing operations in Australia, thereby maintaining its position as a major regional employer. So long as Yanzhou continues to own at least 51 percent of the shares of Yancoal, Yanzhou will ensure Yancoal continues to operate so that it remains solvent."