India follows China in grab for Australia's minerals
Thursday, 22 May 2008, 17:36 IST
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Sydney: India has followed China in making strategic investments in Australian companies to secure long-term supplies of the minerals its factories need. The move on Macarthur Coal by giant steel company ArcelorMittal complicates Canberra's balancing act between ensuring national sovereignty and encouraging foreign investment, new reports said Thursday. The 14.9-percent stake that ArcelorMittal took Wednesday in the Queensland coal miner comes as Australia and India hurry to complete a free-trade agreement before 2010. The stake was just shy of the 15 percent that would trigger an appraisal by the Foreign Investment Review Board. The Sydney Morning Herald speculated that it was both a blocking stake against Chinese company CITIC Resources, which owns 17.7 per cent of the Macarthur, and the prelude to a takeover offer. ArcelorMittal, the world's largest steel company, is Macarthur's biggest customer. Macarthur had been in talks with Anglo-Swiss company Xstrata Coal, and there had been interest from larger miners like BHP-Billiton and Rio Tinto. China signaled its intention to buy up resources in Australia in February when state-owed Chinalco, in concert with US-based Alcoa, took a nine-percent stake in Rio Tinto in what was seen as an attempt to block BHP's proposed takeover of Rio. China worries that a marriage of the world's biggest mining companies would give the new entity an unfair advantage in the marketplace. Big takeovers by foreign companies require the government's blessing, and Canberra is keen to see the international market set prices for its minerals. The government worries that foreign companies taking stakes in mining companies will demand sweetheart deals that will drive down prices.
Source: IANS
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