Purchase of NZ Steel business assets declined

Cheung Kong Infrastructure Holdings Ltd's proposed acquisition of the business assets of New Zealand Steel Mining Ltd, a subsidiary of BlueScope Steel Ltd, has been declined, says Finance Minister Bill English.

Cheung Kong Infrastructure Holdings Limited (CKI) applied for consent under the Overseas Investment Act 2005 to acquire the business assets of New Zealand Steel Mining Limited (NZSM), a subsidiary of Blue Scope Steel. NZSM's business assets include the sands mining and export operation, Taharoa Iron Sands.

Mr English said the application had been declined because CKI did not meet the Overseas Investment Act 2005 criteria of substantial and identifiable benefit which was relevant to the acquisition of business assets which included sensitive land.

The criteria was not able to be met because of the current global economic conditions affecting the business operations of the proposed investment.

CKI is part of the Cheung Kong group, which is the largest business conglomerate in Hong Kong. It has interests in 55 countries, including property, energy, telecommunications, and infrastructure investments.

Taharoa Iron Sands is a dedicated export business based south of Raglan, which mines and exports iron sand to steel producers in China and Japan. NZSM was acquired by Australian-owned BlueScope Steel Ltd as part of the 1992 acquisition of New Zealand Steel.

CKI applied to the Overseas Investment Office in September 2008 to acquire the iron sands mining and export operation. The decision summary is available on the Overseas Investment Office's website www.linz.govt.nz/overseas-investment/decisions-stats-news/decision-summaries/2008-12/taharoa-decision-summary.pdf