Australia will keep mine investments under a microscope

Treasurer Wayne Swan issued the guidance in a speech on the country's foreign investment regime, which has been criticized as opaque and unpredictable and has become a source of some friction in dealing with a wave of inward investment from China. Swan said close scrutiny of the resources sector, Australia's biggest export-earner, was one of three consistent themes that had emerged from foreign-investment decisions taken since the ruling Labor party came to power two years ago. He listed the three themes as:

* Cases will be carefully considered where a proposed investor is also a buyer of the resource; in particular, where the deal involves potential control over pricing and production. * Foreign investment in a resources company must enable Australia to remain a reliable supplier to all current and potential trading partners.

* Business transparency and shareholder discipline is important, and there is a preference to see major companies maintain their listing on stock exchanges. Australia's Foreign Investment Review Board (FIRB), which vets proposals and advises the treasurer whether to approve them, has come under fire in China after opposing or seeking to modify a few Chinese investments in the mining industry.

This year, it blocked a plan for Chinese state-owned firm Minmetals to buy all of an Australian miner then known as OZ Minerals, though it later allowed Minmetals to acquire the bulk of the local firm's assets.

It also rejected a proposal by China Nonferrous Metal Mining (Group) Co. to buy 50.6 percent of rare-earths miner Lynas Corp, but it has approved some other big Chinese investments, including the US$3 billion takeover of Australian coal miner Felix Resources by Yanzhou Coal Mining.

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