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China – Lynas rare earth deal collapses

Friday, September 25th, 2009

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”

Tags: china australia mining, FIRB, foreign investment, LYC, lynas, rare earth, Trading Halt
Posted in ASX Company News | No Comments

Tussle over rare earth minerals

Wednesday, September 2nd, 2009

Australian regulators must soon decide on whether or not to check China’s increasing stranglehold on the rare earth minerals market.

China currently produces 93% of the world’s most rare and valuable elements, two of which are required for various green energy and military technologies.

In Australia, Lynas Corporation and Arafura Resources were ready to open mines last year which could account for a quarter of the world’s production, but after the GFC swept away financial backers, Chinese government-owned companies stepped in with cash.

Australian regulators have already approved the sale of 25% of Arafura, but have deferred a decision on the sale of 51.7% of Lynas until Monday.

Their decision could be influenced by what comes out of a conference in Beijing tomorrow, when it’s expected that the issue of China’s increasing restriction on access to rare earth minerals will be raised by Western governments and multinational corporations.