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Foreign investment- Oaky creek coking coal project



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TREASURER

EMBARGO

S'.UJo

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, MP

^ ^ ;

FOREIGN INVESTMENT: OAKY CREEK COKING COAL. PROJECT

NO. if?

The Government has approved a proposal by HIM Holdings Ltd to acquire from

Houston Oil and Minerals its $8 per cent equity in the Oaky Creek coal '

project. The effect of the transaction will be to increase Australian

equity in the project from 20 per cent to about 40 per cent. This is

clearly a major step towards the project meeting the Commonwealth's

requirement of at least 50 per cent Australian equity by the time the

first shipments of coal take place and for that reason is welcome.

In my statement of 24 September 1980 announcing the Government's approval

for the admission of new partners into the joint venture I indicated that:

"The parties have been advised that the Government would be prepared

to give consideration to approval for the project's development if

they provided suitable joint and unequivocal undertakings that

Australian equity will be introduced to a level of at least .

50 per cent by the time the first shipments of coal take place.

It would also be necessary for them to inform the Government how

they would adjust their equity shares to admit the necessary level

of Australian equity. The Government would wish to see the

Australian equity in place as soon as possible." '

2

The share purchase by MIM in no way changes the Government's decision

announced on 24 September 1980, although it does make it easier for

50 per cent Australian equity in the project to be achieved.

The Government stands ready to consider'giving development approval to

the Oaky Creek project as soon as the joint and unequivocal undertakings,

in respect of reaching 50 per cent Australian equity by the time the

first shipments begin are given and as soon as the parties to the project

inform the Government of how they propose to adjust their equity shares

to admit the Australian equity.

' ' ‘ ' , _ ■ * V ‘ ·.■' ,

CANBERRA ACT

5 Dece m b e r 1980