29 April 2011
Hong Kong option for Aussie miners
|On the cusp of strategic mining deals.|
The closer bonds could see a number of Australian miners soon listing in Hong Kong, including manganese miner OM Holdings (with assets in both the Australian Northern Territories and southern China) and Fortescue (FMG), one of the lowest cost mining firms in Western Australia.
In Australia itself, China is said to be re-positioning for new deals that could make Hong Kong's professional and "soft" services rewarding to Australian and Chinese companies.
No longer just buying iron ore and coal from Australian mining firms Rio Tinto and BHP Billiton, China is reportedly developing its own mining operations such as a Citic Pacific project in Northwestern Australia, which could be among the biggest iron mines in the world.
China's metals conglomerate Sinosteel is also reportedly planning a huge iron ore operation in the Northeast, including finance and management, in company with Australian entrepreneur Clive Palmer and his Mineralogy Pty Ltd.
Hong Kong may not have a long history of dealing with mining companies but its banking and financial services institutions are seen as very capable of applying a Hong Kong model to accommodate appropriate facilities and corporate formation suitable to Australian and Chinese mainland players.
The SAR has also picked up favoured status from experienced mining executives, such as those of Russia's UC Rusal, the world's largest aluminium trader. Rusal listed in Hong Kong last year and senior executives believe that Hong Kong is the natural home of mining and industrial companies, giving regional access to the world's fastest-growing capital markets.
For Australian firms, the relations it has with China have reached a fine point of sophistication, given that the mining states of Western Australia and Queensland have been outperforming the non-mining ones for some time, due to the developing mineral deals with the Mainland.
Many of these mineral-related relationships contain both co-operative and potentially competitive elements, such as when dealing with iron ore projects in West Africa. Australian ore companies are keen to ensure that they have a reasonable share in Africa, given China's growing interest there.
Accurate communication and language are seen as key to good relations in such circumstances. For example, a small business that provides cultural and Mandarin language training programmes (or can provide the same in the Australian business idiom) could do well.
Western Australia's State Government is also keen to develop non-mining industries such as education services, ICT and biotechnology in order to achieve a more balanced economy; that could provide significant openings for Hong Kong consultancies or services firms with regional or Chinese mainland experience.
from Bonnie Shek, Sydney Office
(Image courtesy of ©iStockphoto.com/cuhrig)
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