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Midwest Corp now 100% Chinese owned

March 16, 2009 — BarryK
Most of the time that I was "benevolent dictator" of Puppy Linux, I refrained from political and philosophical postings. I decided that as I was wearing that "hat", it was appropriate. Now though, I feel somewhat unleashed.

The Australian Government allowed this takeover to go through. The world is being hit hard by recession, Australia included, and major mining companies are cutting back. Here in Western Australia, one major mining company has closed a huge newly opened mine and processing facility. Another has been helped to stay afloat by Chinese investors.

Interestingly, in my neck of the woods, the Midwest, a new iron ore mining project is surging ahead. Construction is just about to start. How? Quite simply, the Chinese have heaps of cash and have taken advantage of the bargain basement deals here and are buying into the supply-side of iron and other minerals. They have acquired 100% of Midwest Corp, which gives them total control over the supply price, and it is also going to have a flow-on effect to the other mining companies.

One thing that I have found really interesting is how they have acquired 100% ownership of a public listed company -- by compulsory acquisition of shares! ...which is explained toward the bottom of this page:

http://www.midwestcorp.com.au/

On the upside, these guys are setting up on my doorstep, so I can probably get a job with them.

Comments

"these guys are setting up on my doorstep"


rant
Username: DrOWl
""Chinese have heaps of cash and have taken advantage of the bargain basement deals here and are buying into the supply-side of iron and other minerals." How very wise as the world economy goes down the pan, being in control of basic resources is a mojor advantage. In the UK nearly all cole mining was shutdown (by the government, resulting in mass unemployment and depression in many "traditional" mining town's) and we started importing it instead, now we are seeing big problems the value of the has droped like a lead balloon, so the relative cost of cole has rocketed. Now once again new mines are opening in the UK! Loosing control of basics is building a house cards, all is fine till some one pulls out a card. Ok ill stop ranting now

On a lighter note...
Username: dogone
"Puppy Linux Woof'ems - Now with Iron! Reinforce your Linux desktop experience with the wrought iron flavor of Woof'ems. Woof'ems compliment any IT occassion. And, they're byte sized. It's so hard to resist these opportunities.

comparative advantage
Username: Raffy
"Eh, mining and coding can mix? Maybe you're better off writing and teaching about how to build software for the world's tiniest PCs (netbooks [x86, ARM] and netphones). Treat your website as if it is a library, and splash a box or two of ads. And don't forget that tiny "donate" button as well. The world will be greener with low-power computers, don't you think? And you have a big role in it. :)

Sinosteel
Username: PaulBx1
""All previous shareholders of Midwest5 corporation shares have either accepted Sinosteel's takeover offer, or have been the subject of compulsory acquisition of Midwest shares at $6.38 per share." I assume that means the shareholders voted on this price, and more than 50% accepted, as well as forcing the rest to take it too. That's democracy for you; 51% telling 49% what to do. I have had shares in a corp and had the same sort of thing done to me. As to Chinese taking over businesses, Chinese are people too. They could be doing worse things with their money. Just look at the US.

what's wrong
Username: linuxcbon
"Maybe the Chinese shouldn't buy anything from Australia and let that country get poorer. If that's what you prefer, go for it. The problem is that Australia needs money to buy things. And to get money, you have to sell things too. It's basic economics. I thought it was obvious.

Real question is - why Aussie investors didn't get it?
Username: jamesbond
"I'm quite sure that Australian investors have the fund to buy the mine, if they want to. Why didn't they buy it, then? People like James Packer prefers to invest in gambling and casinos instead of core infrastructure like this. Nobody is to blame here - people at home doesn't like it, the guys next door wants it, so here you go. You can choose not to sell it, obviously, but doing so will also have consequences.

Economics
Username: BarryK
"The core point of my post was the economics of it. The current situation is the mining companies are owned by Australians and various overseas companies, such as US, European and Asian based. They negotiate the best price they can get, and in Australia we get the royalties, plus flow on from companies making healthy profits. However, if the Chinese simply own everything, from digging it out of the ground to manufacturing end products, then, well I don't have to spell it out. There is currently a big fuss in our newspapers about the Chinese wanting to buy 18% of Rio Tinto, our second-biggest miner. Yet this Midwest Corp. takeover seems to have hardly been noticed. The Chinese company is thinking long-term, and good on them. Our WA State government though, seems to be doing something right -- the train that will carry iron ore to the port of Geraldton will be owned by a group of companies, including the State Government. Things are really happening in the Midwest. This is another project, 50% funded by a different Chinese company and 50% Australian company: http://www.projectconnect.com.au/Project_Details.asp?PID=336 Another Chinese company tried to get control of the train project, but lost out to an Australian and Japanese consortium: http://www.wabusinessnews.com.au/en-story/1/71237/State-to-sign-Oakajee-port-deal-tomorrow

The Chinese work hard
Username: linuxcbon
"The Chinese can buy because they are hard workers, their money don't fall from the sky, they work almost 24/7. If the Australians do the same, they will have money and they will be able to buy too. There is no secret.


Tags: general