The Foreign Investment Review Board has approved a joint takeover bid from Baosteel Resources and Aurizon Operations (AZJ) for Aquila Resources (AQA) for $3.40 cash per share.
The board said it has no objection to the bid, which now remains subject only to a condition of 50 per cent minimum acceptance by shareholders and other customary conditions.
There are no Chinese regulatory approvals associated with the offer, Aurizon said.
Aurizon managing director Lance Hockridge welcomed the decision.
"The offer is the first step in a potential pathway to co-investment in resources and greenfield infrastructure, representing a great opportunity to co-develop world-class rail and port infrastructure in Australia, and in the process generate new jobs, boost national exports and deliver to government significant royalty revenue," Mr Hockridge said.