China targets weak Aust miners

State-owned, private firms see buying opportunity amid share sell-off.

China's state-owned enterprises and private firms are preparing to escalate investments in Australia's mining sector to take advantage of low commodity prices before they recover, according to The Australian.

The firms are targeting distressed miners, who have been hit hard by falling commodity prices. The newspaper reported that fund managers, bankers and transactional lawyers have noted an uptick in activity (see Brendon Lau's Mining for a ROE revival).

"Our prediction is that some time in the next six to 12 months, China's new leadership will ramp up the economy again," private equity fund manager Jason Chang told The Australian.

"As with all changes of leadership in China, it takes six to 12 months to settle in. And we expect – and our partners in China are of the same view – that now is the time to position ourselves for growth that is going to come in about 12 months."

Macquarie Group's West Australian chairman Mark Barnaba, also a director at Fortescue Metals Group, said the steep sell-off in mining company shares was “certainly presenting a wonderful set of opportunities”, according to The Australian.