SYDNEY/CANBERRA: Australia and China signed more than US$8.8 billion of commercial and mining deals on Monday, June 21 as a senior Chinese leader urged closer trade ties, in a sign that Australia's mining tax has not deterred investment.
China is Australia's largest export market, accounting for 19 percent of exports worth A$48 billion (US$41.7 billion) in 2009, including almost A$22 billion of iron ore and concentrates.
China's Vice President Xi Jinping is visiting Australia and witnessed 10 agreements, including deals for the state-owned China Development Bank to finance several major mining projects, including a $1.2 billion loan for an iron ore development.
Australian Prime Minister Kevin Rudd, who is fighting a mining industry backlash against the new 40 percent mine-profits tax, highlighted that seven of the 10 bilateral deals signed on Monday covered the resources and energy industries.
"The Chinese are still active partners with all of our resource companies. There is a lot of good stuff going on out there," Rudd told reporters after the signings.
"It is important to separate the facts of what's going on from some of the f*ear that is being pushed by some companies who object to paying a bit more tax."
Xi, regarded as heir apparent to China's President Hu Jintao, later told a business lunch that China was keen to deepen bilateral cooperation on resources and energy, and was keen to make progress on talks on a free trade agreement with China.
The 15th round of free trade negotiations between China and Australia will take place in China later in 2010.
"We need to push forward the negotiations for a free trade agreement," Xi said, speaking through an interpreter. "A comprehensive, balanced, high quality and mutually beneficial free trade agreement is in the fundamental and long term interests of our two countries."
CHINA MINING INVESTMENT
Miners have threatened to axe more than US$20 billion in new Australian projects if the tax is introduced in its current form. The world's second biggest iron ore miner, Rio Tinto, has said Australia is now its top sovereign-risk issue worldwide.
The miners' warnings, backed up by a multi-million-dollar industry ad campaign, have unnerved the public ahead of a general election expected to be held late this year, with opinion polls showing almost half of voters against the new tax.
But the industry's campaign has begun to be undermined by a continued wave of investment into the sector since the tax was first unveiled on May 2. Even while campaigning against the tax, miners have announced project advancements or deals with foreign investors worth more than US$10 billion.
Far from being spooked by the new tax, due to apply from mid-2012, Chinese firms could see it as a chance to strengthen their grip on Australian raw materials, especially iron ore, by providing financing in return for long-term supply agreements.
The China Development Bank agreed on Monday a US$1.2 billion loan facility for the US$2 billion Karara iron ore project in west Australia, which is being developed by Australia's Gindalbie Metals Ltd and China's Angang Steel Co.
The bank also inked a preliminary deal to help fund projects for miner Aquila Resources, including its $3.45 billion West Pilbara iron ore project, also in west Australia.
Australian billionaire Clive Palmer's Resourcehouse also signed an agreement with Export-Import Bank of China, China Power, Metallurgical Corp of China Ltd and China Rail CONSTRUCTION [] Corp for Resourcehouse's thermal coal project in Queensland state.
Monday's agreements also included an expanded partnership between Australia's dominant phone company, Telstra Corp, and China's ZTE Corp, whereby Telstra would become preferred telecoms supplier to ZTE worldwide.
In addition, Australian airline Qantas also announced on Monday an expanded code-sharing alliance with China Eastern Airlines. - Reuters
China is Australia's largest export market, accounting for 19 percent of exports worth A$48 billion (US$41.7 billion) in 2009, including almost A$22 billion of iron ore and concentrates.
China's Vice President Xi Jinping is visiting Australia and witnessed 10 agreements, including deals for the state-owned China Development Bank to finance several major mining projects, including a $1.2 billion loan for an iron ore development.
Australian Prime Minister Kevin Rudd, who is fighting a mining industry backlash against the new 40 percent mine-profits tax, highlighted that seven of the 10 bilateral deals signed on Monday covered the resources and energy industries.
"The Chinese are still active partners with all of our resource companies. There is a lot of good stuff going on out there," Rudd told reporters after the signings.
"It is important to separate the facts of what's going on from some of the f*ear that is being pushed by some companies who object to paying a bit more tax."
Xi, regarded as heir apparent to China's President Hu Jintao, later told a business lunch that China was keen to deepen bilateral cooperation on resources and energy, and was keen to make progress on talks on a free trade agreement with China.
The 15th round of free trade negotiations between China and Australia will take place in China later in 2010.
"We need to push forward the negotiations for a free trade agreement," Xi said, speaking through an interpreter. "A comprehensive, balanced, high quality and mutually beneficial free trade agreement is in the fundamental and long term interests of our two countries."
CHINA MINING INVESTMENT
Miners have threatened to axe more than US$20 billion in new Australian projects if the tax is introduced in its current form. The world's second biggest iron ore miner, Rio Tinto, has said Australia is now its top sovereign-risk issue worldwide.
The miners' warnings, backed up by a multi-million-dollar industry ad campaign, have unnerved the public ahead of a general election expected to be held late this year, with opinion polls showing almost half of voters against the new tax.
But the industry's campaign has begun to be undermined by a continued wave of investment into the sector since the tax was first unveiled on May 2. Even while campaigning against the tax, miners have announced project advancements or deals with foreign investors worth more than US$10 billion.
Far from being spooked by the new tax, due to apply from mid-2012, Chinese firms could see it as a chance to strengthen their grip on Australian raw materials, especially iron ore, by providing financing in return for long-term supply agreements.
The China Development Bank agreed on Monday a US$1.2 billion loan facility for the US$2 billion Karara iron ore project in west Australia, which is being developed by Australia's Gindalbie Metals Ltd and China's Angang Steel Co.
The bank also inked a preliminary deal to help fund projects for miner Aquila Resources, including its $3.45 billion West Pilbara iron ore project, also in west Australia.
Australian billionaire Clive Palmer's Resourcehouse also signed an agreement with Export-Import Bank of China, China Power, Metallurgical Corp of China Ltd and China Rail CONSTRUCTION [] Corp for Resourcehouse's thermal coal project in Queensland state.
Monday's agreements also included an expanded partnership between Australia's dominant phone company, Telstra Corp, and China's ZTE Corp, whereby Telstra would become preferred telecoms supplier to ZTE worldwide.
In addition, Australian airline Qantas also announced on Monday an expanded code-sharing alliance with China Eastern Airlines. - Reuters
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