The Australian has reported that Yancoal’s proposed acquisition of Coal & Allied assets in NSW is far from a done deal.
The $3.2bn deal would see the Chinese-state owned miner acquire a number of coal assets in the Hunter Valley, as well as a significant stake in Port Waratah Coal Services, Newcastle Port’s main operator. This includes the crucial power to appoint and dismiss the PWCS chief executive and chairman.
Before the deal can progress, Australia’s Foreign Investment Review Board (FIRB) has to recommend it to the government, with a final decision made by the Treasurer Scott Morrison.
Despite heightened sensitivity around Chinese ownership of Australian port infrastructure, Yancoal has said it is confident that it can clear all the necessary regulatory hurdles. However, an intervention from other companies using Newcastle Port now means this is “less likely”, according to The Australian.
Other coal exporters are reportedly concerned that when added to existing Chinese government stakes in Newcastle Port, the deal would give China excessive market power and could lead to increased port fees. These concerns are expected to feed into the FIRB review process and could affect the decision.