Special edition: foreign investment in Australia
February 2, 2010
Dear Mayne Report subscribers,
Australia was largely built on foreign capital but that doesn't meant we shouldn't have a decent debate about sovereign funds, Chinese and Singapore government investments in Australia and our continuing relatively poor corporate performance in a globalised world.
I wrote a story in Crikey on Monday about this and an Adrian Chan responded in the comments section claiming it was "your White Australia Policy and xenophobic racism showing".
Hmmm, Adrian will be even less impressed when he checks out some of the emotive comments Dick Smith and I made about Chinese investments in our mining industry on Today Tonight's West Australian shows two weeks ago. This link will be live with that story from about 11.30am today.
Today's Mayne Report is a special edition on foreign investment, focusing on some new and improved lists. We've now come up with 230 foreign companies turning over more than $200 million from Australian sales or Australian owned exports. I'm all for foreign investment but just wish we were as good at business as we are at sport.
We've started a separate list on foreign government investments in Australia, which is dominated by Chinese and Singapore interests.
Even more startingly, we've now identified 50 Australian resources projects worth more than $500 million that are majority foreign controlled. Most of the 15 new additions to that list are Queensland coal mines.
We've also tried ranking the top 10 foreign investors by value in an exercise that no-one has ever attempted in Australia, especially after the resources boom took off.
I'd love some feedback on all this to stephen@maynereport.com.
Don't miss today's video interview with Murdoch whistleblower Bruce Dover and do ya best, Stephen Mayne.
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
Australia was largely built on foreign capital but that doesn't meant we shouldn't have a decent debate about sovereign funds, Chinese and Singapore government investments in Australia and our continuing relatively poor corporate performance in a globalised world.
I wrote a story in Crikey on Monday about this and an Adrian Chan responded in the comments section claiming it was "your White Australia Policy and xenophobic racism showing".
Hmmm, Adrian will be even less impressed when he checks out some of the emotive comments Dick Smith and I made about Chinese investments in our mining industry on Today Tonight's West Australian shows two weeks ago. This link will be live with that story from about 11.30am today.
Today's Mayne Report is a special edition on foreign investment, focusing on some new and improved lists. We've now come up with 230 foreign companies turning over more than $200 million from Australian sales or Australian owned exports. I'm all for foreign investment but just wish we were as good at business as we are at sport.
We've started a separate list on foreign government investments in Australia, which is dominated by Chinese and Singapore interests.
Even more startingly, we've now identified 50 Australian resources projects worth more than $500 million that are majority foreign controlled. Most of the 15 new additions to that list are Queensland coal mines.
We've also tried ranking the top 10 foreign investors by value in an exercise that no-one has ever attempted in Australia, especially after the resources boom took off.
I'd love some feedback on all this to stephen@maynereport.com.
Don't miss today's video interview with Murdoch whistleblower Bruce Dover and do ya best, Stephen Mayne.
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
Foreign owned mines list hits 50
We started the week with 35 entries on our list of foreign-controlled mines worth more than $500 million but a concerted research last night has added another 15 names, lifting the total to 50. Here are the new entries:
Burton: Bowen Basin coking and thermal coal mine in Queensland operated by US company Peabody Energy which produces almost 5 million tonnes a year.
Callide: one of the trophy assets operated by South African company Anglo American. Produces about 10 million tonnes of thermal coal in Queensland's Bowen Basin.
Capcoal: a cluster of mines west of Rockhampton in Queensland which are controlled by South African mining giant Anglo American and has Japanese trading house Marubeni as a minority partner. Total coking coal production is running at 8.5 million tonnes a year.
Collinsville: banks once wrote off more than $500 million on this Queensland coking and thermal coal mine when it was operated by MIM. These days it is controlled by Swiss giant Xstrata with Japan's Itochu as a minority shareholder and it produces almsot 6 million highly profitable tonnes a year.
Cosmos Nickel Project: the trophy asset owned by Jubilee Mines which has just been swallowed by Swiss-based and London-listed Xstrata in a $3 billion takeover.
Dawson Central: BHP's old Moura mine in Queensland plus two additional operations on adjacent tenures. Now 51% owned by the South African giant Anglo Australian and 49% by Japanese trading house Mitsui. After an $800 million expansion is now producing more than 12 million tonnes of thermal and coking coal a year.
Ensham: the thermal coal mine in Queensland produces more than 7 million tonne a year. It is 85% owned by Japanese company Idemitsu, one of the world's biggest privately owned energy companies. Japanese utility J-Power owns 10% and Korean company LG has the remaining 5%.
Jellinbah East: open cut coal mine near Blackwater in Queensland that produces almost 4 million tonnes of coking and therml coal a year. South African mining giant Anglo American has about 23%, Japanese trading house Marubeni 15% and the remainder is held by private companies and individuals such as Jim Gorman and Sam Chong.
Liddell: the Hunter Valley coal mine has just been expanded to 3.5 million tonnes per year and is 67.5% owned by Swiss giant Xstrata and 32.5% owned by the Japanese joint venture Mitsui-Matsushima.
Moranbah North: underground coking coal mine in Queensland's Bowen Basin that produces about 4.5 million tonnes a year for South African mining giant Anglo American.
Mt Owen/Ravensworth East: this combined Hunter Valley coal mine has development approvals to expand to a whopping 15 million tonnes per annum. It is 100% owned by Swiss-based mining giant Xstrata.
Newlands: includes the Eastern Creek open cut coal mine and the Southern underground mine west of Mackay in Queensland. Total coking and thermal coal production of almost 9 million tonnes a year. Controlled by Swiss giant Xstrata with Japan's Itochu holding a minority interest.
Newpac No1 Colliery: Xstrata has just won control of the Hunter Valley coal mine through the $1 billion-plus takeover of Resource Pacific. The Newpac mine is having a new longwall built and should reach 8 million tonnes per year by 2010.
North Goonyella: underground coking coal mine in Queensland's Bowen Basin which produces 1.5 million tonnes a year and is owned by US coal company Peabody Energy.
Oaky Creek: This group of underground and open cut coking coal mines in Queensland's Bowen Basin produce 6.5 million tonnes a year and are owned by Swiss mining giant Xstrata.
Callide: one of the trophy assets operated by South African company Anglo American. Produces about 10 million tonnes of thermal coal in Queensland's Bowen Basin.
Capcoal: a cluster of mines west of Rockhampton in Queensland which are controlled by South African mining giant Anglo American and has Japanese trading house Marubeni as a minority partner. Total coking coal production is running at 8.5 million tonnes a year.
Collinsville: banks once wrote off more than $500 million on this Queensland coking and thermal coal mine when it was operated by MIM. These days it is controlled by Swiss giant Xstrata with Japan's Itochu as a minority shareholder and it produces almsot 6 million highly profitable tonnes a year.
Cosmos Nickel Project: the trophy asset owned by Jubilee Mines which has just been swallowed by Swiss-based and London-listed Xstrata in a $3 billion takeover.
Dawson Central: BHP's old Moura mine in Queensland plus two additional operations on adjacent tenures. Now 51% owned by the South African giant Anglo Australian and 49% by Japanese trading house Mitsui. After an $800 million expansion is now producing more than 12 million tonnes of thermal and coking coal a year.
Ensham: the thermal coal mine in Queensland produces more than 7 million tonne a year. It is 85% owned by Japanese company Idemitsu, one of the world's biggest privately owned energy companies. Japanese utility J-Power owns 10% and Korean company LG has the remaining 5%.
Jellinbah East: open cut coal mine near Blackwater in Queensland that produces almost 4 million tonnes of coking and therml coal a year. South African mining giant Anglo American has about 23%, Japanese trading house Marubeni 15% and the remainder is held by private companies and individuals such as Jim Gorman and Sam Chong.
Liddell: the Hunter Valley coal mine has just been expanded to 3.5 million tonnes per year and is 67.5% owned by Swiss giant Xstrata and 32.5% owned by the Japanese joint venture Mitsui-Matsushima.
Moranbah North: underground coking coal mine in Queensland's Bowen Basin that produces about 4.5 million tonnes a year for South African mining giant Anglo American.
Mt Owen/Ravensworth East: this combined Hunter Valley coal mine has development approvals to expand to a whopping 15 million tonnes per annum. It is 100% owned by Swiss-based mining giant Xstrata.
Newlands: includes the Eastern Creek open cut coal mine and the Southern underground mine west of Mackay in Queensland. Total coking and thermal coal production of almost 9 million tonnes a year. Controlled by Swiss giant Xstrata with Japan's Itochu holding a minority interest.
Newpac No1 Colliery: Xstrata has just won control of the Hunter Valley coal mine through the $1 billion-plus takeover of Resource Pacific. The Newpac mine is having a new longwall built and should reach 8 million tonnes per year by 2010.
North Goonyella: underground coking coal mine in Queensland's Bowen Basin which produces 1.5 million tonnes a year and is owned by US coal company Peabody Energy.
Oaky Creek: This group of underground and open cut coking coal mines in Queensland's Bowen Basin produce 6.5 million tonnes a year and are owned by Swiss mining giant Xstrata.
More foreign companies doing $200m Down Under
The research into foreign ownership of our mines has thrown up a few more entries for our burgeoning list of foreign companies turning over more than $200 million a year. The full list now exceeds 230 and dwarfs the 75 Australian companies we can name that generate more than $200 million offshore. Anyway, here are some of the newbies:
China Iron & Steel: owns 40% of the Channar iron-ore mine in the Pilbara which produces about 10 million tonnes a year worth more than $700 million based on 2008 prices.
Idemitsu, Japan: one of the world's biggest privately owned energy companies and owns 85% of the Ensham thermal coal mine in Queensland which produces more than 7 million tonnes a year.
J-Power, Japan: large energy utility which owns small stakes in several Australian coal mines such as Ensham and Blair Athol.
Matsushima, Japan: owns 16.25% of the Liddell coal mine in the Hunter Valley which has just been expanded to 3.5 million tonnes per year.
Mulpha: Malaysia, large owner of Australian hotels such as Hayman Island, Sancturary Cove and Sydney's InterContinental.
Palmary Enterprises: Ukraine, billionaire Gennadiy Bogolubov paid more than $1 billion in 2007 for control of manganese producer Consolidated Minerals.
Idemitsu, Japan: one of the world's biggest privately owned energy companies and owns 85% of the Ensham thermal coal mine in Queensland which produces more than 7 million tonnes a year.
J-Power, Japan: large energy utility which owns small stakes in several Australian coal mines such as Ensham and Blair Athol.
Matsushima, Japan: owns 16.25% of the Liddell coal mine in the Hunter Valley which has just been expanded to 3.5 million tonnes per year.
Mulpha: Malaysia, large owner of Australian hotels such as Hayman Island, Sancturary Cove and Sydney's InterContinental.
Palmary Enterprises: Ukraine, billionaire Gennadiy Bogolubov paid more than $1 billion in 2007 for control of manganese producer Consolidated Minerals.
Can offshore miners be our salvation?
Whilst the level of foreign ownership of Australia's resources projects is disturbingly high, the number of mid-cap ASX companies developing mining projects offshore is encouraging, especially the small army that have emerged in Perth. Who would have thought that there would ever be more listed companies based in Perth than either Melbourne or Sydney?
Unfortunately, the majority of them are, like Fortescue Metals, still not actually producing anything but there is plenty of blue-sky potential. We're going to list all the individual offshore projects being developed and operated by Australian-based miners excluding BHP and Rio Tinto and start with the following 6:
Kingsgate Consolidated: only capitalised at $368 million but operates the Chatree Gold Project in northern Thailand, which produces 100,000 ounces a year.
Newcrest Mining: capitalised at $15 billion, it is the second biggest Australian-based miner after BHP-Billiton and owns 82.5% of the Gosowong/Tougaraci gold mine in Indonesia.
Oxiana Resources: the $5 billion company operates the Sepon gold and copper mine in Laos which is worth more than $1 billion.
Paladin Resources: now capitalised at $3.5 billion thanks largely to the recently commissioned Langer Heinrich uranium mine in Namibia which is ramping up to full capacity of 2.6 million pounds a year.
Resolute Mining: the company has three gold mines and is forecasting total production of 330,000 ounces in 2007-08. Golden Price in Tanzania has just been extended for another 6 years.
Riversdale Mining: Sydney-based company has soared to a market cap of more than $1.5 billion with its major asset being the Zululand Anthracite colliery in Africa which it hopes to operate for the next 17 years.
Unfortunately, the majority of them are, like Fortescue Metals, still not actually producing anything but there is plenty of blue-sky potential. We're going to list all the individual offshore projects being developed and operated by Australian-based miners excluding BHP and Rio Tinto and start with the following 6:
Kingsgate Consolidated: only capitalised at $368 million but operates the Chatree Gold Project in northern Thailand, which produces 100,000 ounces a year.
Newcrest Mining: capitalised at $15 billion, it is the second biggest Australian-based miner after BHP-Billiton and owns 82.5% of the Gosowong/Tougaraci gold mine in Indonesia.
Oxiana Resources: the $5 billion company operates the Sepon gold and copper mine in Laos which is worth more than $1 billion.
Paladin Resources: now capitalised at $3.5 billion thanks largely to the recently commissioned Langer Heinrich uranium mine in Namibia which is ramping up to full capacity of 2.6 million pounds a year.
Resolute Mining: the company has three gold mines and is forecasting total production of 330,000 ounces in 2007-08. Golden Price in Tanzania has just been extended for another 6 years.
Riversdale Mining: Sydney-based company has soared to a market cap of more than $1.5 billion with its major asset being the Zululand Anthracite colliery in Africa which it hopes to operate for the next 17 years.
Foreign government investments in Australia
The debate about sovereign funds in Australia is off in earnest so we're going to list every known foreign government investment and track it over time.
It would help if the Foreign Investment Review Board published these lists themselves or if an opposition politician asked Treasurer Wayne Swan to table this sort of information in Parliament, but for now we've there's just information available from press reports and stock exchange announcements.
China and Singapore dominate, but don't forget the Arab state which controls half of our stevedoring duopoly. Go here for the full list.
It would help if the Foreign Investment Review Board published these lists themselves or if an opposition politician asked Treasurer Wayne Swan to table this sort of information in Parliament, but for now we've there's just information available from press reports and stock exchange announcements.
China and Singapore dominate, but don't forget the Arab state which controls half of our stevedoring duopoly. Go here for the full list.