Andrew Forrest’s hypocrisy in criticising the federal government’s resource tax — and claiming it could lead to a flood of Chinese buyers — has been underlined by news from China.

This was his claim a week ago.

“The federal government’s super-profits tax will result in Chinese mining companies gobbling up Australian assets, Fortescue Metals boss Andrew Forrest says.

“The mining boss’ strong new line of attack in the tax debate was immediately endorsed by the coalition today.

“Mr Forrest says Labor’s proposed resource rent tax will be good for Chinese investors.”

Not only has he willingly sold equity in Fortescue Metals Group to Chinese buyers (about17%), he did a cosy pricing deal that fitted the Chinese steel mills pricing agenda in late 2008 rather than stick it out and remain independent. He did that deal as he searched unsuccessfully for cheap Chinese bank loans to fund his development plans.

Now Bloomberg reports that Poseidon Nickel, which is chaired by Forrest, is in China looking for finance to help the company restart production in Western Australia.

“Poseidon Nickel Ltd, an Australian exploration company chaired by billionaire Andrew Forrest, is in talks with a number of potential Chinese investors to fund restart of mine production within two years.

“We are talking to investors and off-take parties in China about the investment required to get us to go to production,” said David Singleton, chief executive officer of the Perth-based company, in an interview in Shanghai.

“Chinese companies are scouring the globe to secure raw materials to feed the world’s fastest growing major economy, targeting mining companies in need of funds. Poseidon is seeking between $50 million and $100 million for its Mt Windarra project, which will supply stainless steel makers in China.”

Poseidon suspended restoration work on Mt Windarra in October 2008 because of turmoil in global financial markets. (Another example of  the point that treasury secretary Dr Ken Henry made last week about the furphy that the mining industry “saved” Australia from recession).

Of course, the Chinese banks and resource buyers know the tax won’t impact them and that people such as Forrest  are merely talking their book for Australian consumption. If Forrest really believed his line, he would repeat it to their faces, that’s if he’s the blunt, straight talkin’ business man he claims to be.

So on the one hand, Forrest warns of a horde of Chinese investors coming to gobble up our resources because of the resource profits tax, on the other he and his companies are busy trying to encourage the same hordes to finance HIS (my emphasis) business ambitions.

And it would seem he is supported by the federal opposition. But then after its new refugee policy last week, the opposition is willing to bang any old “red horde” line to scare voters.

It makes you wonder who is using whom in this debate.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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