Australia OKs China's State Grid's investment

State Grid Corp pamphlets are displayed at the company's branch office in Nantong, Jiangsu province. The electricity distributor has recently been acquiring overseas assets.[Photo / China Daily]

CANBERRA - Australian Treasurer Joe Hockey announced on Friday that the Australian government has conditionally approved a foreign investment application from the State Grid Corporation of China to acquire 19.9 percent of SP AusNet and 60 percent of SPI (Australia) Assets Pty Limited and SPI (Australia) Trust (trading as Jemena).

SP AusNet is a dual Australian Securities Exchange and Singapore Exchange listed energy infrastructure entity which owns and operates electricity transmission networks, electricity distribution networks and gas distribution networks in Victoria, southern Australia.

Jemena is a private company that owns and operates electricity, gas and water assets in eastern Australia.

China's State Grid is the world's largest electric utility and ranked seventh in the Fortune Global 500.

According to Hockey, this application is approved on the condition that at least 50 percent of the members to be appointed by State Grid to the Boards of SP AusNet and Jemena are Australian citizens who are ordinarily residents in Australia.

"Australia is open for business and we welcome foreign investment when it is not contrary to the national interest," he emphasized in a statement Friday.

Last week, Hockey announced the Australian government has made a decision to remove certain foreign investment conditions placed on Yanzhou Coal Mining Company, a Chinese State-owned enterprise, restricting its ownership of Yancoal Australia Limited, an Australian-based coal producer of Yanzhou Coal Mining Company.

Hockey explained that the reason for removing the conditions is due to significant challenges, since those conditions were imposed, have emerged for the Australian coal industry, including slowing demand, declining coal prices and a number of mine closures.

Earlier this month, Hockey made a decision to block US food giant Archer Daniel Midland's A$3.4 billion ($3.09 billion) bid for Australia's GrainCorp, one of the country's major grain-related companies.

The treasurer said the proposed deal was contrary to Australia' s national interest, citing concerns over the control of key infrastructure, such as ports, and the fact it was still taking time for increased competition to emerge since the 2008 scrapping of the single desk for wheat exports.