What are the conditions and requirements imposed on Yanzhou?
Q1. What are the conditions and requirements imposed on Yanzhou?
A1. The requirements are listed as follows:
1. Reduce its ownership of Yancoal from 100 per cent to less than 70 per cent and to relist Yancoal;
2. Reduce its economic interest in Yancoal’s former Felix Resources coal mining assets to less than 50 per cent by the end of December 2013; and
3. Reduce its economic interest in two other coal mines, Syntech Resources and Premier Coal mines, to less than 70 per cent by the end of December 2014.
Q2. What is the current change of Yanzhou’s control in Yancoal?
A2. Yanzhou had reduced its stake in Yancoal to 78 per cent, but due to changing circumstances sought the Treasurer’s approval to remove the conditions, allowing it to maintain its current level of ownership. The Treasurer also noted that the Government “has no in-principle objection” to a 100 per cent takeover of Yancoal by Yanzhou in the future.
Q3. The Treasurer removed the conditions in exchange for undertakings from Yanzhou. What are the undertakings?
A3. The undertakings are listed as follows:
1. Continue to support Yancoal’s Australian operations and maintain Yancoal’s position as a major regional employer
2. Provided its interests in Yancoal remain at least 51%:
3. Ensure Yancoal remains solvent; and
4. Support Yancoal’s plans to expand the Moolarben open cut mine.
Q4. What does the decision reflect?
A4. The decision affirms that each foreign investment application is considered on a case-by-case basis, and it also demonstrates that Australia has a robust foreign investment regime which is able to deal with diverse and complex proposals and to assess applications on their merits and without discrimination. The decision is a good indication that the Government can engage successfully with foreign government investors applying the national interest test.