China has ditched plans for a $500 million investment in rare earths company Lynas, after the conditions imposed by the Foreign Investment Review Board were found to be objectionable.
China Nonferrous Metal Mining Co (CNMC) had planned to increase its stake to 51.6%, however the FIRB required the ownership to be less than 50%, and the number of directors on the board to be less than half.
As a result, CNMC is walking away from the deal, leaving Lynas in a trading halt and reassuring the market that other funding sources are being finalised.
The FIRB director yesterday advised Chinese investors to talk to them first, and not use the media to lobby their proposals.
Lynas Corporation, ASX Code: LYC
Chart source: The Bourse. Click here for a free software trial!
For more on this news story:
- The Age: “China quits rare deal with Lynas”
- The Australian: “Chinese investors warned on media fast track”