Australian firms are once again cashing in on major transactions, triggered by China’s appetite for natural resources. Allens Arthur Robinson and Corrs Chambers Westgarth jumped into action when mining company Yanzhou Coalproposed an A$3.3bn acquisition of Brisbane-headquartered Felix Resources.

If completed, this will be the largest-ever Chinese deal in the Australian coal sector. Allens’ corporate partner Andrew Knox (pictured) is advising Felix Resources on the transaction. Corrs, who acted for Yanzhou on its acquisition of Austar Coal Mine in 2004, is advising the mining company on the deal, with partner Andrew Lumsden leading the Corrs team. Yanzhou, listed in Shanghai, Hong Kong and New York, has also sought out King & Wood and Baker & McKenzie for advice on PRC and Hong Kong law respectively.

As the world’s biggest coal and metal user, China has been scouring the globe for energy and commodities to feed its thrumming economy. Spurred by the government’s US$585bn economic stimulus plan, local companies have invested about US$2.2bn in Australian energy and resources companies this year.

“China is a substantial consumer of many Australian resources. There is no reason why the rising interest will not follow the same pattern as past investment influxes,” says Knox. “The outcome will be closely scrutinised as there appears to be a significant appetite for more deals, dependent on there being substantial prospects [here] for a successful deal,” he added.

Employing over 47,000 people, Yanzhou Coal is located in Shandong, and is principally engaged in underground coal mining, preparation and processing, sales and railway transportation.

Felix Resources is an independent ASX-listed coal producer with four operating mines in NSW and Queensland. The company produces pulverised coal injection (PCI), semi-soft coking and thermal coals, selling 4.8 million metric tonnes in the past year.

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