There was yet more evidence of China flexing its investment muscle overseas, this time in Australia. Three Chinese state-owned companies signed contracts in Beijing to finance and construct a US$1.38bn iron ore mine, rail line and seaport in Western Australia's Pilbara region.
The project brings together China Railway Engineering Corp, China Metallurgical Engineering Construction Group Corp and China Harbor Engineering Corp with Australia's Fortescue Metals Group Ltd (FMG) to develop the Christmas Creek mine, said to have reserves of 1.1 billion tons of ore.
Construction of the mine, as well as the rail line and port linking it to the outside world, was expected to be completed in time to ship ore by 2007, FMG officials said. By far the largest element of the project is the rail line linking the mine with new port facilities planned at Port Hedland.
FMG owns the leases to the mine site and the iron ore itself, but the three Chinese companies will help get it out of the ground and to China, where supply contracts have already been made.
The deal is the latest in a series of contracts signed by Chinese companies aimed at securing overseas supplies to fuel China's ravenous demand for raw materials and energy resources.
FMG chief financial officer Chris Catlow said the deal had been structured to deliver the Chinese groups a profit, but said their key interest was in using the project as a platform to expand internationally.
"What this provides for the Chinese is the opportunity to showcase their capabilities in international construction projects," he told an Australian newspaper. "And the alliances they are formulating with the groups that we've (brought) into China, will result in a lot of far-reaching opportunities for all parties."