Industry insiders said
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South said that Chinese mining companies were "a bit quiet" in terms of overseas mergers and acquisitions (M&A) in the first half of this year because of the soaring price of high-level resources. However, he added that now is a good time for M&A activity because of a slight rebound in the price of resources after huge declines in recent months.
He predicted that
He added that possible resource and carbon taxes, proposed by the Australian government and likely to come into effect in July next year, will undoubtedly impose pressure on Chinese mining companies.
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However, Deloitte's South said Chinese companies need to find the right partners because the mining industry is a highly risky business and most Chinese companies lack experience of overseas business management.
One recent example of an unsuccessful overseas mining deal is the suspension of an iron ore project by a subsidiary of Sinosteel Corp Ltd in
Industry insiders said
The management risks are big for Chinese companies, said Andrew Zhu, a partner in tax and business advisory services at DTT.
He said Chinese companies should build better relationships with foreign companies to ensure cooperation in the exploration of resources.
Chinese companies may have to look further than they had anticipated to attract the necessary funds over the long term, according to the DTT report. They also need to build the relationships required to gain access to foreign markets, while gaining better insight into those regions, it said.