Chinese Investors get Thumbs Up for Australian Mining

It's no secret that China has generated huge amount of wealth for its population over the last decade, with more millionaires and ultra-high net worth individuals....

It's no secret that China has generated huge amount of wealth for its population over the last decade, with more millionaires and ultra-high net worth individuals emerging than in any other country in the world.

However, restrictive Chinese legislation has largely prevented large-scale investment overseas, leaving many to find 'alternative' means of getting their money out of the country.

The situation altered dramatically last week, when China further relaxed restrictions around investments in overseas markets, particularly in mining and energy. This has prompted experts in Australia's booming mining industry to forecast significantly increased investment in Western Australia, where the majority of operations are located.

beijing development

China's appetite for steel remains consistent as it pushes ahead with widespread urbanisation

China's reformist government encourages overseas investment

Previously, any overseas investment project in the mining sector worth more than $10m required the approval of China's commerce ministry, the MOC, in contrast with the $100m benchmark for other types of overseas investment.

China has been Australia's largest trading partner for a considerable length of time and with one of the largest foreign reserves in the world, state investment in Australian mining companies has remained consistent to help meet the needs of its growing economy.

However, wealthy Chinese individuals have until recently been restricted from exploiting Australia's mining sector because of lengthy approval processes and indeterminate outcomes, in most cases resulting in missed opportunities.

miners in australia

Australia's mining sector is recruiting heavily to move productivity forward

Chinese demand for resources expected to continue for at least 5 years

Chinese President Xi Jinping and his leadership have been a highly reformist government to date with a clear vision of the longer term future of China. President Xi has stated a clear goal that China will become the world's biggest outbound investor through to 2018, by then investing more than $570bn a year.

Although resource projects remain a focus, the type of Chinese investment in Australia continues to evolve with the short-term iron ore production projects being replaced by more imaginative larger scale M&A transactions and strategic tie-ups.

Residential developments near mining operations best investment value

In general, the Australian mining sector is very optimistic about China's new reforming leadership as it pushes more investment capital in its direction. There is also good reason to believe that China's resource demand will remain strong as the country develops its urbanisation and associated infrastructure, underpinning all investments in energy and mining.

construction of miners homes

Considerable investment opportunities exist in residential developments for mining workers

Over the last five years, Australia's mining sector has become heavily capitalised due to China's consistently rising need for resources. Now the phase of construction and development of mining operations has largely been completed, the sector is working towards stepping up productivity.

Mining sector shifts focus to increasing productivity

This will generate considerable investment opportunities in real estate throughout Western Australia as mining operators increase manpower to drive production forward. This has significantly lifted interest in the construction of residential developments in these regions, where investments can achieve up to a huge 17% ROI each year.

IPIN Global has recently launched an exciting investment opportunity in Pilbara, Western Australia – the heart of tin mining country. With 30% regional population growth expected as a direct result of the increasing manpower requirements of the mining sector, this opportunity represents one of the best currently available in international property investment.

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- Wednesday 22 October 2014

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