The Australian government has given approval for China's largest steel group, Baosteel Group, to invest US$285.6 million for a 15 per cent stake in Aquila Resources, a small Australian iron ore and coal miner.
This follows the decision last week to allow Yanzhou Coal Mining's US$3.54 billion takeover of Felix Resources, an Australian coal miner.
The two decisions allowing investment from two Chinese state-controlled companies is an indication that Australia is coming to terms with the onslaught of mainland investment that has been circling around its resource companies.
China is cash-rich but needs resources while Australia has the resources but many of its companies need capital to develop their projects.
One of the conditions of the deal is that Baosteel will assist Aquila in sourcing low-cost financing from Chinese institutions to underpin development of its projects.
The high level of Chinese interest in Australian companies triggered a public debate amid fears that Australia was in danger of losing control over its resources.