Chinese miners dump plans for Australian arm of business

JUST three months after winning a hard-fought approval from Federal Treasurer Joe Hockey, Chinese miner Yanzhou has dumped plans to take full control of its struggling Australian arm.

Yancoal owns or manages three Central Queensland coal mines Yarrabee, Middlemount - which it owns with Peabody - and Cameby Downs in the state's south-west.

In December, as the dust settled on the Treasurer's decision to refuse Archer Daniels Midland from scooping up agricultural giant GrainCorp, the Chinese Government-owned Yanzhou was given the nod to exert full control over Yancoal.

Its intention was to pull it from the Australian Stock Exchange.

On Monday, Yancoal told the ASX that Yanzhou had now called off its plans.

The decision could have huge ramifications for Yancoal, which less than a month ago announced an after-tax loss of $832 million for 2013.

In that report, Yancoal warned that "in light of coal market conditions" and other financial issues, Yancoal opted not to forecast how much coal it would mine beyond 2014.

Despite its hellish 2013, the company reported it had received injections of cash from Yanzhou.

Yancoal spokesman Greg Houlis said Yanzhou had already in 2014 delivered a loan of $300 million.

Mr Houlis said the company's reasoning for its decision was a matter for them.

He said coal market conditions had deteriorated since Yanzhou announced its intentions to take over the company in July last year.

"Currently it's difficult times not just for Yancoal but for the entire industry," he said.



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