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BIZCHINA> Top Biz News
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Sources: China firms eyeing Fortescue
(Agencies)
Updated: 2009-02-18 19:18 "They are happy to speak to people about proposals for securing the financing for their expansion," said a banker involved in the process. Fortescue founder and Chief Executive Andrew Forrest, who recently reduced his stake to 35 percent, has repeatedly said he would welcome Chinese investment. Fortescue sells all its iron ore to more than two dozen steel mills in China. China buyers CIC Chairman Lou Jiwei and his colleagues, including Zhou Yuan, newly appointed head of alternative investment at CIC, visited Fortescue during a recent trip to Australia, said one source with direct knowledge of the matter. During the visit, the CIC officials did not have any formal talks about the potential purchase of assets or stakes in Fortescue, said the source, adding CIC was more likely to have a role as a behind-the-scenes backer of a deal by a State-run Chinese steel maker. CIC's potential interest in backing a deal is preliminary, the person said. "Chinese steel makers like Baosteel will be more likely to make an actual deal," he added. The National Development and Reform Commission, China's top economic planning body that oversees major strategic investments abroad, has been informed of potential interest by Chinese steel makers in Fortescue, sources said. News of the talks comes on the heels of two major deals involving Chinese investment in Australian resources. State-owned aluminum maker Chinalco agreed last week to pay $19.5 billion for stakes in global giant Rio Tinto's aluminum, copper and iron ore assets and convertible notes, while China's State-owned metals trader Minmetals has bid $1.7 billion for debt-laden OZ Minerals Ltd, the world's no 2 zinc miner. Both deals need to be cleared by Australian Treasurer Wayne Swan. Sources said talks involving Fortescue were at very early stages, and it was not clear whether any Chinese investment would go beyond the 15 percent threshold that would require Australian government approval. (For more biz stories, please visit Industries)
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