Protests derail steel mill privatization

Talk about resourceful. Nearly a week of protests by steel workers successfully derailed attempts to privatize state-run Linzhou Iron & Steel, the second such failure we’ve seen in a month’s time in China. Workers wanted more compensation from their new owners, and protests culminated over the weekend as armed police were sent in to disperse the crowd. China last week announced it was halting the opening of new steel mills and that it wanted a greater say in deciding international prices for iron ore and it appears that there may be some forward progress on contentious iron ore contract negotiations. Baosteel and other mills agreed to a 35% price cut for iron ore from Aussie miner Fortescue Metals Group. Of course the big fish of Rio, BHP and Vale have yet to be fried. On the topic of Sino-Land of Oz relations, diplomatic tensions between the two countries may complicate approvals for Yanzhou Coal Mining’s US$2.95 billion takeover bid for Felix Resources. The Australian firm’s board of directors approved the bid last Friday, but still has to pass approvals from Australia’s Foreign Investment Review Board and Felix shareholders.