No role for the FIRB in Rio

I know of none; any more than there is evi­dence that Japan­ese joint-own­ers of most of the big coal mines in Queens­land are under­cut­ting ener­gy prices.

There is no rea­son to believe that Chi­nal­co, which is appar­ent­ly bor­row­ing the cap­i­tal, would plan to make a loss on its Rio invest­ment. As for it’s Chi­nese gov­ern­ment own­ers, they have too many bad invest­ments in US trea­suries right now to be hun­gry for more.

In fact, AK might argue that the cur­rent Board has lost prof­it-max­i­miz­ing knack, for the moment, pre­fer­ring safe­ty and sav­ing-face over future prof­it. Includ­ing by turn­ing down a last minute offer from BHP. Let the share­hold­ers pun­ish them for that if it’s true.

The gov­ern­ment will not help Rio Tin­to or the Aus­tralian econ­o­my by allow­ing bureau­crats to make a judge­ment on a mat­ter where they have no exper­tise, no more fore­knowl­edge than the rest of the mar­ket, and less stake in the out­come of their guess­es. Com­pa­nies are well-reg­u­lat­ed in Aus­tralia on a non-dis­crim­i­na­to­ry basis both before and after they estab­lish in the mar­ket, who­ev­er their own­ers may be. We can be as open to invest­ment by Chi­nese cus­tomers as by Japan­ese or UK cus­tomers.

Any­way… could there be a worse time for repelling invest­ment in Aus­tralia? The secret tri­bunal of the For­eign Invest­ment Review Board should leave this well alone.

I know of none; any more than there is evi­dence that Japan­ese joint-own­ers of most of the big coal mines in Queens­land are under­cut­ting ener­gy prices.

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