Currency safety is another enticement for Chinese mining firms, as cross-border mining investments in yuan can help avoid exchange rate risk when countries such as the US launch quantitative easing policies, said Guo Jianwei, an official with the People's Bank of China.
Insufficient resources in China create demand for mining companies to expand overseas, and increasingly mature exploration technologies allow them to do so more easily, Zhang Yudong, a consultant at Beijing-based Adfaith Management Consulting, told the Global Times Monday.
Although State-owned companies have abundant capital and advanced technologies, State ownership creates bigger obstacles to going abroad because resources are connected to national security and strictly controlled in many countries, Zhang said.
China's biggest aluminum firm Chalco had to scrap a bid for a majority stake in Mongolian miner SouthGobi in September due to local government opposition, one of the latest cases where a Chinese State-owned mining company was stopped from making an overseas acquisition.
Private mining companies, on the other hand, have seen many successes, making $1.18 billion in outbound investments in the first half of 2012, or 79 percent of total mining investment, said Chen at the China Mining Association.
Sichuan-based mining company Hanlong Group successfully acquired Australian miner Sundance Resources in August, a bid which was helped by the experience of its team of international professionals, Zhang said.
Landmark building should respect the public's feeling
Feedback
RSS
