Hunan Valin Iron & Steel has received Australian government approval to take a 17.4 per cent stake in Fortescue Metals Group while China Minmetals Corp has submitted a revised offer for OZ Minerals after Canberra objected to the original deal. Hunan Valin will spend A$644.8 million (HK$3.45 billion) buying new shares in Fortescue, the third-largest iron ore mining company in Australia, to become its second-largest shareholder after founder Andrew Forrest. The flurry of Chinese interest in Australian assets, which includes more than 12 smaller deals launched over the past year, has sparked a nationalist backlash that is likely to worsen as the global economy continues to suffer. Australian Treasurer Wayne Swan, who is responsible for approving foreign investment, capped the Chinese firm's investment at 17.55 per cent and will require any board member nominated by Hunan Valin to declare potential conflicts of interest on sales between the two companies. Fortescue will quadruple iron ore sales to Hunan Valin to 4 million tonnes a year from 2010. The company's shares rose 2.41 per cent to close at A$2.55. Separately, Minmetals, the mainland's largest metals trader, yesterday put in a revised bid for OZ Minerals, the second-largest zinc miner in the world, according to a statement filed with the Australian stock exchange. OZ Minerals had A$1.3 billion debt due yesterday and the company said the new deal would cover that amount but did not give a specific figure. The company said the revised offer was incomplete. Mr Swan last week rejected the original proposal from Minmetals because it included the Prominent Hill copper and gold mine. Canberra said Chinese ownership of that asset would have constituted a risk to the country's national security because the mine is near the Woomera missile and aerospace test facility. Mr Swan will have to sign off on the revised proposal which includes the Averbury, Century, Golden Grove and Rosebury mines in Australia and the Sepon copper and gold mine in Laos. Also excluded in the new proposal are the Martabe gold and silver mine and listed assets such as Toro Energy. OZ Minerals said it was still seeking an extension from lenders on the debt due and would make a statement today. BHP Billiton, the largest mining company in the world, is widely expected to try to pick up the company's remaining assets. Australia is also judging the merits of a US$19.5 billion bid by Aluminum Corp of China for an almost 18 per cent stake in Rio Tinto Group as well as stakes in some key assets. 'It's just much easier to block the bigger deals because there aren't that many people that you're going to upset compared to the political hit [the government] will take from approving one,' said one market observer.