China Inc poured almost $1.4 billion into the WA economy in 2016, about half of it in the mining sector as its direct investments nationwide hit their highest level since the global financial crisis.
A new report released last week by KPMG and the University of Sydney, the 2017 update of Demystifying Chinese Investment in Australia, showed mining interests comprised $865 million of direct investments from China in 2016.
The bulk of those were in WA, with gold and lithium investments leading the way.
Chinese interests tipped $745 million into the WA mining industry last year, comprising 54 per cent of their total spend in the State.
Agribusiness came in at $333 million after Shanghai CRED took a minority stake in Gina Rinehart’s bid for the Kidman and Co pastoral empire, along with other purchases across the Goldfields and the north of the State.
Real estate investments totalled $258 million.
The report only considers purchases of projects and joint venture relationships in its investment totals and does not include indirect investment like offtake agreements. China’s direct investments in the local lithium industry were highlighted by Tianqi Lithium breaking ground on a $400 million lithium processing plant in Kwinana.
The Chinese company owns 51 per cent of Greenbushes in the South West, the largest hard-rock lithium mine in the world.
This week, Mt Marion part-owner Jiangxi Ganfeng emerged with a 5 per cent stake in Pilgangoora developer Pilbara Minerals.
Chinese interest in the gold industry continues with Zhaojin Mining Industry Co.’s alliance last week with local producer Ramelius Resources.
Meanwhile, Shandong Tianye Group, which reportedly dropped its proposed $US1.3 billion Super Pit bid last month, recently picked up fellow Chinese gold miner Hanking’s Southern Cross operations for $330 million.
The report’s writers said China’s $13.75 billion injection into the Australian economy last year set the scene for growth.
“There are signs of a growing maturity by Chinese investors in the Australian market,” they said.
“The number of joint ventures is increasing with more repeat investments by established Chinese companies.
“This has set a foundation for growth.”
By Josh Chiat
The West Australian