China plays preferred banker to miners at the dawn of the Asian Century

If anyone still doubts that the seismic shift of financial power from West to East is fully underway they need look no further than the US$17 billion Chinese companies and sovereign wealth funds pumped into the mining sector in investment commitments last year.

That number could have been closer to US$30 billion if Chinalco had been successful in its bid for a 50% stake in a number of Rio Tinto‘s (RTP-N, RIO-L) assets.

Indeed China is sitting on over US$2 trillion and its well-known appetite for commodities will see the nation’s investment in offshore mining projects shift into higher gear in the years ahead.

Most of the acquisitions in 2009 were in iron ore, coal, and copper with the largest being Yanzhou Coal’s US$2.9 billion takeover of Australian-based Felix Resources (FLX-A).

The number of Chinese investments in offshore mining assets last year detailed in a list recently compiled by Deutsche Bank runs to 26, and is worth closer scrutiny by players in the industry who might be on the lookout for trends or possible deals.

In the coal sector Lark Guangdong pledged US$350 million to PT Bumi and Noble acquired Gloucester Coal (GCL-A) for US$500 million. China Investment Corp purchased US$1.98 million in debt instruments of Bumi Resources, while China Investment Corp. took a stake in SouthGobi Energy Resources (SGQ-T) for US$500 million.

Iron ore deals included Wuhan Iron and Steel’s controlling stake in Centrex  Metals for US$150 million — and a stake in Consolidated Thompson Iron Mines (CLM-T) for US$240 million. Wuhan Iron and Steel is one of China’s largest steel makers. Hunin Valin invested US$900 million for a 17.5% stake in Fortescue Metals (FMG-A) and Baosteel purchased a stake in Perth-based Aquila Resources (AQA-A) for US$270 million. Xuan Yuan Industrial Development issued a US$260 million project loan to Petropavlovsk (POG-L), while China Railways invested US$244 million for a stake in African Minerals (AMI-L). Sinosteel also acquired a stake in Murchison Metals (MMX-A) and Minmetals bought an iron ore project from Macarthur Minerals (MMS-V) for US$85 million.

In copper, Tongling/China Railway acquired Corriente Resources (CTQ-T) for US$650 million, while China Non-Ferrous Metal Mining acquired Luanshya Copper and pledged investment in its Zambian copper asset to the tune of US$450 million. Sinchuan Hanlong issued US$700 million in debt and equity for a controlling stake in Moly Mines (MOL-T, MOL-A).

In the copper-gold sector, Zijin Mining spent US$520 million on its acquisition of Indophil Resources (IRN-A), while First Pacific took a stake in Philex Mining (PX-P) of the Philippines for US$215 million. Finally the China Development Bank and Samruk signed off on a US$2.7 billion loan to Kazakhmys (KAZ-L).

Precious metals deals included China Sci-Tech’s purchase of the Martabe project from Oz Minerals (OZL-A) for US$211 million and Guangdong Risking Assets Management’s US$150 million purchase of a stake in Pan Australian Resources (PNA-A).

Other investments included Minmetals US$1.4 billion acquisition of Oz Minerals (zinc/copper); China Non-Ferrous Metal Mining’s US$10 million stake in Terramin (TZN-A) (zinc-lead); Zhongjin’s US$40 million purchase of a controlling stake in Australian zinc miner Perilya; and China Investment Corporation’s US$1.5 billion stake in Teck Resources (TCK.B-T, TCK-N).