Foreign government investments in Australia

January 20, 2017

This list tracks major sovereign investments in Australia, demonstrating how both Singapore and China are set to own more Australian business assets than our own government.

Major Chinese Government investments in Australia

Chinalco: spent $15.5 billion for 9% of Rio Tinto shares in London on February 3, 2008.

China Iron & Steel: The Rio Tinto-operated Channar iron-ore mine in the Pilbara has a capacity of 10mtpa and is 40% owned by China Iron and Steel, an investment worth well over $2 billion.

China Petrochemical Corporation: China's biggest energy distributor secured 60% and control of the Puffin oil field in the Timor Sea from the struggling AED Oil in 2008. The deal values the assets at $1 billion.

CNOOC: holds a 25% share in China LNG, a new joint venture within the existing $19 billion North West Shelf structure that diluted the other six joint venture parties down to 12.5% each.

Shanghai Baosteel Group: owns 46% of the Rio Tinto-operated Eastern Range iron ore mine in Pilbara which produces 6.5 million tonnes a year worth more than $500 million a year. Chinese investment now worth more than $1 billion.

CITIC: paid more than $400 for its 22.5% stake in the Portland Aluminium Smelter in the 1990s.

Shougang Corp: spent $400 million buying 20% of WA iron ore company Mt Gibson Iron in early 2008 and then teamed up with fellow Chinese investors APAC as part of an emergency $162 million capital raising in January 2009 that left Shougang with 14.34% and APAC with 28%.

CIC: alongside Macquarie bank, China Investment Corporation agreed, in June 2009, to lend $200 million in Australia's leading property trust Goodman Group.

Sinosteel: completed a $1.37 billion takeover of WA iron ore hopeful Midwest Corp after a 2008 takeover bid pitched at $6.37 a share. Would like to buy neighboring Murchison Metals, but FIRB has limited it to a maximum 49%.

CITIC: spent $113 million in July 2007 lifting stake in Macarthur Coal stake from 11.6% to 19.9% but is now losing on the investment after the resources bubble burst.

Consortium: five Chinese companies were given FIRB approval in January 2008 to develop the $3.5 billion Oakajee port and rail project in WA and then former WA Premier Alan Carpenter announced the winning tenderer in August 2008, but construction hasn't started yet.

Chalco: in September 2007 Queensland government awards rights to develop $3 billion bauxite project near Aurukun, which Noel Pearson has claimed includes an unfair forced land grab. This is now in doubt as Chinalco will be keen to focus its attention on expanding Rio Tinto's Queensland bauxite operations at Weipa.

Anshan Iron & Steel: paid $39 million in September 2007 for 13% of iron ore miner Gindalbie and signed $1.8 billion joint venture deal to develop the Karara Iron Ore project in Western Australia. Backed this up with a $162 million placement at 85c a share to Ansteel in February 2009 which increased its stake to 36.3%.

Shougang Corp: China's fourth biggest steel group spent $56 million in March 2007 buying 13% or iron ore developer Australian Resources and has an option to inject a further $42 million. Shougang has also agreed to fund the $US2.1 billion development of the Balmoral South mine and port project in WA thorugh an interest free loan and also buy the entire output.

China Metallurgical Group: paid $400 million for the Cape Lambert Iron ore project in WA in 2008, which is now in doubt given that China has secured its supplies through Rio Tinto.

China Nonferrous Metal Mining Co (CNMC): secured a 51.66% shareholding for $252 million of Sydney-based rare earths company Lynas. CNMC also provided a corporate guarantee to a Chinese Bank to raise another $253 million, which brings the cost of transaction to $505 million. They have since been denied the percentage of ownership by a decision by the regulator FIRB which requestedto be cut to less than 50 per cent.

Resource Development International: Gold Coast-based Clive Palmer who still claims to be worth more than $5 billion was hoping to raise more than $1 billion from Chinese investors through a float of this iron ore venture that is still to get off the ground.

Zhongjin: China's third largest zinc producer paid $45 million to take control of Broken Hill-based Perilya in early 2009.

Deals that have fallen through

Chinalco: spent $15.5 billion for 9% of Rio Tinto shares in London on February 3, 2008, then made a $24.4 billion offer for Rio Tinto, which would have been the biggest deal in Australian corporate history. Chinalco, otherwise known as the Aluminum Corp. of China, signed an agreement to invest in Rio Tinto to secure resources for China and assist Rio Tinto with debt reduction.

Sinochem Corp: China's biggest chemicals trader, offered a revised $2.6 billion or $12 per share takeover for pesticide maker Nufarm, which was rejected, after decreasing their initial offer of $13 per share. A deal with Japan's Sumitomo Chemical was swiftly finalised when Sumitomo agreed to pay $14 per share to buy up to a 20 per cent stake in the Victorian-based Nufarm.

Offers on the table

Bright Foods: one of the world's biggest food companies, best known in China for making "white rabbit" lollies, made a $1.5 billion bid for the 130-year-old CSR - Australia's main sugar refiner.

Singapore Government investments in Australia

1995: Singapore government body, Capita Land, buys controlling stake in property developer Australand which is now worth more than $1 billion.

June 2000: Singapore Power, which is fully owned by the state, buys Victoria's monopoly electricity transmission business Powernet for $2.1 billion.

2001: Singtel, which is majority owned by the state, pays $14 billion, much of in shares, for Optus.

April 2004: Singapore Power paid $5.1 billion for TXU's Australian energy portfolio in April 2004, although $2.2 billion of retail and generation assets were on-sold to China Light & Power in March 2005. Late in 2005, 49 per cent of the remaining Australian power assets were floated in a vehicle called SP Ausnet, raising $1.3 billion.

2007: Singapore Power pays $4.5 billion in cash to Alinta shareholders to become the monopoly gas distributor in NSW and the largest distributor of electricity in Victoria.

May 2007: Singapore sovereign fund, the GIC, pays $717 million for a 50% stake in Westfield Parramatta, Australia's third-most valuable shopping centre.

June 2007: the GIC teamed up with the Commonwealth Bank and the Myer family to pay $600 million for the prestigious Myer Melbourne complex.

June 2007: Temasek Holdings paid $401 million or an excessive $7.30 a share for 12% of ABC Learning to become the largest shareholder in the world's biggest childcare company.

August 2007: Cityspring Infrastructure, which is backed by Temasek, paid a hefty $1.2 billion for the Basslink electricity cable linking the Victorian and Tasmanian grids.

August 2008: Temasek helped save Australia's biggest office tower investor by underwriting part of an emergency $1.6 billion capital raising that left it with almost 20%.

The Middle East

Dubai World, a holding company owned by the government of Dubai in the United Arab Emirates bought P&O in March 2006 for $US7 billion, giving it a half share in Australia's lucrative stevodoring duopoly.

Sheik Mohammed: the ruler of Dubai splashes $460 million buying the thoroughbred, training and bloodstock operations controlled the Ingham family.

Kuwait Government: owns 50% of Australia's tallest office tower, the Rialto, through the St Martins property business which also controls three buildings in Perth's St George's Terrace.

Rest of the World

UK: The government-underwritten BBC bought control of Australia's iconic travel publishing business Lonely Planet in July 2007.

Canada: the Canadian Pension Plan now owns 15% of tollroad giant Transurban after a recent placement to reduce debt.

Netherlands: The Dutch government and eduction sector pension fundand, Stichting Pensionefonds ABP, which controls about $350 billion in assets, bought 40% of Goldfields House at Circular Quay in Sydney from the struggling Valad Property Group.

Additionally, here are lists of foreign companies generating more than $200m, and Australia's improving foreign ownership record.

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Foreign government investments in Australia

January 20, 2017

This list tracks major sovereign investments in Australia, demonstrating how both Singapore and China are set to own more Australian business assets than our own government.