Maritime News

August 12, 2010 12:19

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Mining Taxation calls look to Chinese investors in Africa

CHINESE investors are looking at non-Australian regions to put cash into as uncertainty grows about the investment climate here. That is the view of one of the region’s most senior corporate lawyers involved in China’s global resource transactions.

Norton Rose partner Ian McCubbin, who runs the firm’s global China
business group and just returned after three weeks in Beijing, said that
despite the Gillard government’s recent mining tax compromise, Chinese
companies were still wary of investing.

“The issue was and remains that the tax applies to existing projects.
The fact it’s there, in whatever form, is seen as a sovereign risk
issue,” Mr McCubbin said.

“Anecdotally in Beijing, the uncertainties have given added impetus to a
decision by Chinese enterprises to diversify raw materials into places
like Africa.”

The mining tax and other issues related to the federal election are
expected to take centre stage at a two-day China-Australia Resources
conference in Melbourne starting today.

The conference comes as the Foreign Investment Review Board suspends
rulings until after the election, meaning applicants have been asked to
withdraw and resubmit applications. That move sees a return to delays in
FIRB approvals that became common under the Rudd government.

Sources close to the process said this had been at least partly because
Kevin Rudd had insisted on viewing each application related to China.

“The change in leadership in the Labor Party was seen in China as a
positive one in the context of foreign investment ,” Mr McCubbin said.

“Rudd came in amid hope and excitement because of his language skills
and background in China, but I think over time that became a burden,
given the nature of his government.”

Until the slip into caretaker mode because of the election, the Gillard government had been faster on its rulings.

Source: The Australian