China's state-backed Sinosteel Corp (中國中鋼) yesterday launched a A$1.2 billion (US$1.1 billion) takeover bid for iron ore miner Midwest in the first hostile approach by a Chinese company for an Australian firm.
Sinosteel, China's No. 2 iron ore importer, said it is offering A$5.60 for each Midwest Corp Ltd share -- 35 percent more than Midwest's closing price on Thursday.
Midwest shares surged more than 30 percent yesterday to as high as A$5.48 before closing at A$5.43.
"It's time Midwest shareholders had the opportunity to decide for themselves the value of their investment in Midwest," Sinosteel president Tianwen Huang (
The bid underscores China's eagerness to gain a foothold in Australia's booming resource sector as demand and prices for raw materials surge, and reflects Beijing's worldwide efforts to ensure that China gets the resources it needs to continue its runaway economic expansion.
China overtook Japan last year to become Australia's largest trading partner, and its voracious appetite for coal, gas and other resources has fueled Australia's unprecedented 17 successive years of growth.
News of the bid came as Australia's central bank chief said that China is a key part of a fundamental shift in the structure of the global economy, and that its influence was not likely to abate anytime soon.
"All the indications are that the rise of China is not just a cyclical event, but a structural change of the first order," Reserve Bank of Australia Governor Glenn Stevens said in a speech published yesterday on its Web site.
While China's growth rate in recent years of around 11 percent would slow "at some point," the country's economy still had years of strong expansion, he said.
Sinosteel already holds a 19.9 percent interest in Midwest, which is planning a project that would produce 15 million tonnes of iron ore a year in Western Australia state to shore up its iron ore supply.
The government's Foreign Investment Review Board has already approved the offer, Sinosteel said.
Australian Prime Minister Kevin Rudd, a former diplomat and China specialist, did not comment yesterday on the bid, but has said previously his government would block any foreign takeover that is not in Australia's national interest.
Midwest advised its shareholders to take no action until the company has had time to consider the bid, and reminded shareholders it rejected as too low an informal bid from Sinosteel in December at the same share price.
Several Chinese steelmakers have formed joint ventures or bought into other Australian iron ore projects in moves interpreted as attempts to provide China with alternatives to resource giants Rio Tinto and BHP Billiton.
BHP Billiton has launched a US$147 billion bid for Rio Tinto that has concerned Chinese steelmakers who worry that, if the deal goes ahead, the resulting mining behemoth could have too much control over prices.
Sinosteel signed a joint venture with Rio Tinto subsidiary Hamersley Iron in Western Australia in the 1980s, giving it "the track record, financial strength and technical expertise to develop and operate large scale mining projects," Huang said.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to