Michael Feller
China's energy bonanza
China's electricity consumption has rebounded and with it deals are being penned with Australian companies across the energy spectrum, from renewables to uranium.
Hydro Tasmania yesterday announced the sale of its Roaring 40s’ China wind farm portfolio to joint venture partner CLP Group, which apart from supplying electricity to Hong Kong and owning TRUEnergy in Australia, is a major power producer in mainland China. CLP says it will pay state-owned Hydro Tasmania $HK750 million ($134 million) for the portfolio.
Hydro Tasmania says it expects to receive an additional cash payment of around $15.5 million for the Khandke Wind Farm in the Deccan Highlands of India, which the Roaring 40s also owns. The sale agreement otherwise stipulates that Roaring 40s will continue to operate its portfolio of Australian wind farms as a 50:50 joint venture.
"The sale of the Chinese portfolio to CLP will enable Roaring 40s to concentrate on market opportunities in Tasmania and nationally, which are growing as a result of a positive shift in federal policy," said Hydro Tasmania chairman David Crean. "Our focus will be on developing Musselroe in Tasmania and Waterloo in South Australia."
Corpac Patners in Sydney advised Hydro Tasmania on the transaction. Corpac has a specialist practice in energy and is run by former Hartley Poynton adviser Robert Crossman.
United Uranium has meanwhile signed a term sheet with Henan Provincial Non-Ferrous Metals Geological and Mineral Resources Bureau as a stepping stone to further cooperation on the company's projects in the Northern Territory.
The deal gives Henan the option to subscribe for up to 6 million shares in the company for a total consideration of up to $1.5 million and an option to earn a 51 per cent interest in each granted tenement currently held by United by spending at least $5 million on each or $15 million in total. Any binding agreement will need to be vetted by shareholders and regulators in both Australia and China.
The deal caps off a number of similar arrangements struck between Australian firms and their descriptively-named Chinese counterparts. Adelaide-based Terramin Australia recently secured $46 million from China Non-Ferrous Metals Industry's Foreign Engineering and Construction Company and trading house Transamine, while Territory Uranium Company sold a number of assets to China's Anhui Geology & Mining Investment and Bauxite Resources moved forward in its MoU with Shandong Provincial Bureau of Geology and Mineral Resources (Raining resources, April 1).
Last month, Northern Territory rare earths company Arafura Resources raised $24 million from Nanjing-based East China Exploration & Development Bureau for a quarter of Arafura's shares on issue (China steps up, March 12).
Former Minmetals Australian representative Simon Yan is United's chairman and private Chinese interests form the bulk of the company's share registry. CK Locke & Partners and Steinepreis Paganin have acted as United's corporate and legal advisors, respectively.
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