The Minister for Resources and Energy, Martin Ferguson AM MP, has welcomed the merger between Yanzhou Coal Mining Limited and Felix Resources, describing Australia's trading relationship with China as healthy and mutually beneficial.
Speaking at a ceremony in Sydney attended by the Chinese Ambassador, Minister Ferguson said the $3.5 billion acquisition was one of the top 10 mergers and acquisitions undertaken in Australia in 2009 and represents a good deal for Australia and China.
"The Australian Government encourages foreign investment and welcomes proposals when they are in our national interest and when they bring about the development of Australia's resources for the benefit of Australians," Minister Ferguson said.
"The acquisition demonstrates Australia's openness to foreign investment in our resources sector. Yanzhou Coal's investment in Australia is a timely reminder of the growing strength and depth of the trade and investment relationship between Australia and China.
"This will be a long term and mutually beneficial partnership with Australian and Chinese interests each having a stake in every part of the supply chain. This means ongoing investment, jobs and income for regional communities as well as broader benefits for Australia's economy."
Minister Ferguson noted that China had been important to Australia during the global financial downturn. The value of Australia's mineral exports increased 69% to $33 billion in 2008-09.
China's emergence as a coal importer helped cushion the impacts of the downturn on all major coal exporting countries including Australia. China's imports of thermal and metallurgical coal for 2009 are estimated to have increased by 115% and 385% respectively over 2008 import levels. Australia secured 70% of this increase in the metallurgical coal import market.
"As China's demand for coal continues to rise, Australia is well placed to supplement China's domestic coal production. We have a proven track record as a competitive, efficient and reliable long term supplier of high quality coals for our international customers," Minister Ferguson said.
Minister Ferguson said Yanzhou Coal Mining Company - as one of the largest producers of coal in China - will bring expertise and resources to further develop some of Australia's valuable coal resources and continue work on Felix Resources' development of a low emissions coal technology with the potential to reduce greenhouse gas emissions from power generation by 20% to 30%.
"I will be very interested to see how this project progresses as developing and implementing cost-effective technologies which can reduce coal's CO2 emissions are critical to the global response to climate change," he said.