Reception for Zhu Rongji, Premier of China – Melbourne 1997
AUSI DRI Project - Signing Ceremony 1997
AUSI DRI Project - Signing Ceremony 1997
Mount Gibson - MOU Signing Ceremony Beijing 1997
New Dalian Port - First Channar Shipment October 2007
Channar Joint Venture
AGD - Seven Treasures Gold JV - Sigining Ceremony 1995
Yunnan Tin - China Lectures June 2006
Yunnan Tin - Senior Management
Yunnan Tin
YTC Resources IPO - ASX May 2007
With YTG President Xiao, Mr Wang and Mr Gao
With Mr Mathew Liu
Banquet Great Hall of the People, China Mining Summit, Dec 2007
Olympic torch, Beijing Olympic Games, August 2008
2008 Beijing Olympic Games
China IPO -Textile Manufacturing Factory, Zhejiang Province China
China IPO - Ningbo China May 2008
China Practice
Chambers & Company has an extensive history of excellence in providing a full range of services for projects with the People's Republic of China.Through our involvement in key foreign investment deals into and out of China, Chambers & Company has built up a unique network of contacts at the most senior levels of Chinese ministries and corporations. This has facilitated our clients' negotiations and approval processes for their investments in China.
In Australia, Chambers & Company has acted for many of the leading Chinese state owned enterprises as well as other governmental ministries and agencies on a number of major investments in the resources (mining and energy), property, manufacturing and travel industries since 1984.
In China, we have acted successfully for Australian government agencies as well as international corporations on projects for resources, mining, chemical, engineering and construction, manufacturing, food processing as well as trading transactions.
Our China Capabilities
Chambers & Company have been the lead lawyers on two out of the only three successful major operating iron ore joint ventures with China in Australia. We were the lead lawyers on China's first overseas project, the AUD420 million Channar joint venture with Hamersley Iron when we acted for the Ministry of Metallurgical Industry (now Sinosteel). We were also the lead lawyers on the Wheelarra joint venture between BHP Billiton and four of China's largest steel mills. The combined contracts for these two projects exceed AUD20 billion.
Our law firm was awarded the 2005 Energy and Resources Deal of the Year Award by the Australasian Legal Business Magazine for our role in the BHP Billiton project.
Our firm has been involved in China since 1984 and our senior partner Robin Chambers has travelled to China more than 150 times over that period.
We have unique expertise on China-Australia projects having facilitated numerous successful investments in projects for Chinese clients in China and Australia.
Our firm's competitive experience on iron ore projects in Australia
Our firm’s lawyers collectively have special experience on major projects with China which is very competitive with other law firms in Australia.
For these projects, we have advised on the negotiation and documentation process to convert proposed investments and off-take purchases from initial Letters of Intent and Memoranda of Understanding into complex legal documentation.
Our experience has extended across the whole range of legal inputs involved for major resources and power projects. These have included the Lead Counsel role in the negotiation and documentation of project ownership structures, the key supply contracts, the engineering and construction contracts for infrastructure development, the off-take contracts to underpin the project financing, and the Australian and State Government approvals including the State agreements.
CRA – Hamersley Iron
Mr Chambers’s own background as General Counsel of CRA Ltd (now Rio Tinto Ltd) over a 14 year period involved all aspects of the iron ore industry development and operations in Western Australia over many years while he was still at CRA, and in particular for Hamersley Iron. That involvement has continued in subsequent years on other iron ore mining and processing projects.
Channar Joint Venture
In October 1984 our firm was engaged by China Metallurgical Import and Export Corporation established under the Ministry of Metallurgical Industry (now Sinosteel Corporation) as its lead lawyers on the negotiations of the AUD420 million Channar Iron Ore project in Western Australia. That project was China’s first major offshore investment and was regarded as the “model” foreign joint venture structure for China. It attracted very high level attention from both the Chinese and Australian Governments and involved the personal participation of the Chinese Premier Mr Zhao Ziyang and the Australian Prime Minister, Mr Robert Hawke on certain issues which arose during the negotiations. The Chinese Government referred to Mr Chambers as the first foreign lawyer appointed by the Chinese Government when the firm was engaged for that project.
Proposed Capital Iron & Steel Project – BHP
In 1993 we were engaged by Shougang (Capital Iron & Steel) to undertake negotiations with BHP Limited to do an iron ore joint venture in Western Australia following the precedent of the Channar joint venture with Hamersley. Those negotiations continued for many months before they were terminated and Shougang instead invested in a Peru iron ore project.
AUSI DRI Project
In the mid 1990’s, we were the lead legal counsel appointed by Australian United Steel Industry Pty Ltd on its AUD2 billion direct reduced iron (DRI) project to be developed in Western Australia using Hamersley iron ore and natural gas from the North West Shelf consortium. Our involvement for that project extended over a three year period, and covered every aspect of the project development. That included all the due diligence investigations, the project joint venture documentation, the engineering and procurement contracts, the iron ore and gas supply contracts, the DRI off-take sales contracts with China, Taiwan, South Korea and Indonesia, and all the approvals required by the project lenders. The financial advisers for that project were the Australian Macquarie Bank and Merrill Lynch of New York.
That project failed due to the Asian financial crisis in 1997. Before that happened, the project had attracted strong interest from China for a major equity investment as well as guaranteed off-take purchase contracts for the Chinese steel industry. China Iron & Steel Industry & Trade Group Corporation, which was the corporatised entity under the Ministry of Metallurgical Industry (now Sinosteel Corporation), was joined by Shanghai Baosteel together with COSCO as the Chinese participants. The Chinese Premier, Mr Zhu Rongji, signed a protocol during his visit to Australia in support of that project with the Australian Prime Minister, Mr John Howard during the project negotiations.
Mt Gibson DRI Project
After that project development ceased, we advised the Mt Gibson syndicate, which was developing another smaller DRI project in Western Australia, on obtaining Chinese equity investment and markets and introduced them to potential investors in China.
Argyle Diamonds Project
While not an iron ore project, this was another landmark WA-based project for our law firm. Mr Chambers was the Lead Lawyer on the Argyle Diamond Project, from the initial listing of the commercial and legal structures as 10 points on a blank sheet of paper through to the complex project negotiations and documentation, the negotiation of the State Agreement with the WA Government, the precedent- establishing sales contracts with De Beers’ Central Selling Organisation in London including face to face meetings with Harry Oppenheimer in Johannesburg to break the CSO’s monopoly on the diamond retailing business, and the project financing of this project with the international banking syndicate.
North Limited – Robe River
In the late 1990’s, following a mandate from the Tangshan Municipal Government, we acted for North Limited on a potential investment in the Tangshan Port Project. North’s role was to be the foreign partner for the port development in a joint venture with the resulting tax incentives then available for the project. In return major Chinese steel mills such as Capital Iron and Steel would guarantee iron ore sales into China for at least 5 million tonnes, which was a considerable increase over its sales of around 2 million tonnes previously. These negotiations were well advanced when Rio Tinto initiated its takeover of North Limited.
SASE Pig Iron Project
We had advised AuIron Energy Limited on its AUD1.2 billion SASE Pig Iron Project in South Australia which was focused on the Chinese steel industry as its major market. The leading edge technology for that project was a direct smelting process developed by Ausmelt Limited, an Australian technology company based in Melbourne. This is competitive technology with Hamersley’s HIsmelt technology. (Ausmelt has built six non-ferrous smelters in China using its non-ferrous technology.) Mr Chambers was Chairman of Ausmelt for some time.
Our involvement on this project extended over a three year period and included negotiations with a number of Chinese steel mills for their participation in the project. The South Australian and Australian governments provided development grants for this project.
BHP Billiton – Wheelarra Joint Venture
The Wheelarra iron ore joint venture was the largest iron ore project undertaken by the Chinese government in Australia which involves four of China’s leading steel mills major investment in the Wheelarra project, entering into off-take iron ore contracts for 12 million tonnes a year over a 25 year period worth more than AUD11.6 billion in exports. (Under subsequent sales contracts, the annual sales were increased to 24 million tonnes.)
Taken together with our firm’s role in the Channar Joint Venture, we have been responsible for iron ore export contracts to China well in excess of AUD20 billion from Australia.
We were appointed originally by Wuhan Iron and Steel (Group) Corporation and Tangshan Iron and Steel Co Ltd, and later joined by Maanshan Iron and Steel Company Limited and Jiangsu Shagang Group Co Ltd as the lead lawyers for the Chinese participants in their project with BHP Billiton. To do so, we had to beat all the large Australian law firms for this representation, just as we did for the Channar iron ore project.
The Wheelarra project legal documentation was finally executed in Perth on 28 September 2004 by all four Chinese Steel Mills, together with BHP Billiton and two Japanese trading houses. The documentation comprised 181 agreements signed on that day. These included a complex joint venture agreement, a management agreement, a sub lease agreement to avoid amending BHP Billiton’s relevant State Agreement, FOR sales contracts with the Mt Newman project for the Jimblebar iron ore for blending purposes for Mt Newman, equipment usage agreements, off-take export contracts on a CFR basis so that BHP Billiton can control the shipping, and other documentation to entrench the returns on the capital investments made by the Chinese participants since the equity payments were made direct to BHP Billiton and not for mine development.
These negotiations with BHP Billiton extended essentially full-time over more than six months of internal meetings and face-to-face negotiations scheduled with BHP Billiton in China and Australia. After initially negotiating and documenting Letters of Intent for the Chinese Steel Mills, we undertook a comprehensive due diligence investigation on behalf of the four Chinese Steel Mills as BHP Billiton declined to provide any legal representations to the Chinese on the underlying aspects of the project. This involved the traditional data room period for the preparation of a detailed report comprising at least 150 pages on all aspects of the project. This was followed by further negotiations with the WA and Australian governments for all relevant approvals and consents under the WA State Agreement, other WA legislative requirements, Foreign Investment Review Board and Australian Competition and Consumer Commission approvals.
All documentation and communications were in the English and Chinese languages and on a real time basis. While we were required to advise on all the Australian and Chinese legal aspects of the transaction, with our expertise and experience on similar major projects we were often called upon to provide more than strict legal advice to assist the Chinese negotiators who had not previously had experience on major international projects of this kind. We have been accustomed to doing this on similar transactions on many occasions.
This project commenced operations in October 2005.
Mineralogy Project – Wuhan Iron & Steel (Group) Corporation
We were briefed by Wuhan to undertake a comprehensive due diligence investigation of the proposed magnetite project with Mineralogy in 2005. This project was to be developed in a three stage process beginning with a concentrate production and extending to direct reduced iron and pellet projects. In addition to the due diligence investigation, we undertook a review of the proposed legal documentation and the structuring arrangements for this project. Wuhan ultimately did not proceed with the project and, instead, CITIC Pacific entered into the necessary arrangements to develop this project.
Hope Downs Project – Major European Steel Producer
We acted for a major European steel producer to undertake the preparation of a comprehensive due diligence investigation on this proposed project. Over a number of months we were involved in a review of all the legal documentation prepared by the vendor. This was a competitive tender process which extended over some months as our client negotiated the tender with Hancock Resources, the owner of the project. Ultimately, the project was done by Rio Tinto.
Fortescue Metals Group – Major European Steel Producer
This is one of the largest new iron ore projects in Australia involving a total investment of around AUD3 billion comprising a mine development initially to produce 45 million tonnes of iron ore over a 25 year period, together with infrastructure development to construct a 260 km railway and new port and processing facilities. We acted as the legal adviser for our client, which is the largest steel producer in the world, on these project negotiations.
Over a nine month period during 2005, following extensive due diligence investigations, we prepared all the key joint venture documentation comprising six major agreements and many hundreds of pages of documentation for our client’s participation in the proposed unincorporated joint venture. Negotiations took place in Singapore, Paris and Perth over that period. Ultimately our client did not proceed with this project and FMG has now financed it in the US bond market.
Midwest Corporation Limited – Sinosteel Corporation
In July 2005 we were instructed by Sinosteel Corporation as its lead lawyers to document and negotiate a joint venture with Midwest Corporation Limited for the undertaking of three stages of scoping, pre-feasibility and bankable feasibility studies on its proposed Koolanooka and Weld Range Iron Ore Projects and related infrastructure facilities and port and rail facilities. Over a period of three months involving eight negotiating sessions in Beijing, Hong Kong and Perth, documentation was finalised and signed in Perth on 18 October 2005.
Gindalbie Metals Limited – Anshan Iron & Steel Group Corporation
In March 2005 we were engaged by Gindalbie Metals Limited as its legal adviser to negotiate and document a Feasibility Studies Joint Venture in connection with the proposed Mt Karara Concentrate-Pellet Project, the Blue Hills Haematite Project and the associated infrastructure projects in Western Australia in conjunction with Anshan Iron & Steel Group Corporation. The signing ceremony for the legal documentation was held in Parliament House, Canberra during Chinese Premier Wen Jiabao’s visit to Australia in April 2006.
Aurox – Vanadium and Titanomagnetite Projects
During 2007, we were engaged by Aurox Resources Limited on its proposed vanadium and titanomagnetite joint venture with Chengde Iron & Steel Group Co Ltd in Western Australia. As the initial stage on this project, we drafted the Heads of Agreement setting out the broad principles to be agreed for this project. Most recently, we have drafted the long term sale contract to underpin the project. Subsequently, Chengde entered into a long-term sales contract in lieu of joint venture participation. We also advised on a further long-term sales contract for another Chinese steel mill RockCheck. (Panzhihua) The combined offtake sales for these two contracts are for a total of 6 million tonnes per annum.
FerrAus Mining Limited
We have been engaged by FerrAus on its proposed new iron ore project located near BHP's Wheelara projects mine to provide advice on third party access rights to existing rail information in the Pilbara region of Western Australia. Under the state agreement entered into between BHP Rio Tinto and Fortescue Metals obligations exist to require these mining companies to open up the rail facilities to access by other mining companies. FerrAus has its new mine located near Jimblebar Mine which is held in a joint venture between BHP and four of China's major steel mills. We are the lawyers for the Chinese steel mills on that joint venture. The third party access issues have been the subject of considerable litigation with BHP Rio and Fortescue and most recently the Australian High Court decided that BHP's rail operations were not part of the mining process and accordingly were available for third party access. However, the nature and extent of the third party access is still to be resolved.
State Development Bank of China
In connection with another new Australian iron ore project, advised the State Development Bank of China (the "Bank") in connection with a proposed loan of approximately US$14 million to be secured over shares in an Australian company listed on the Australian Stock Exchange partly owned by a major Chinese steel mill. Our advice included investigation and assessment of the validity of the initial acquisition of the shares in the Australian company, dealing with Foreign Investment Review Board approvals with regard to the proposed charge and, investigating issues relating to restrictions on dealing with the shares imposed by the initial share subscription agreement.
Wuhan Iron and Steel (Group) Corporation - Two South Australia Iron Ore Projects
We have recently completed comprehensive due diligence investigations for two South Australian iron ore projects with two Australian mining companies. Each project has involved extensive negotiations of binding Heads of Agreement to establish the commercial terms for the Chinese investment. We are now in the process of negotiating the various legal documents for the project which are expected to take the form of a unincorporated joint ventures and to include direct acquisition of shares in the target companies. In addition, both projects will involve the establishment of new infrastructure including power, water and the construction of new ports for export of the iron ore to China.
Inbound China Projects
Recent Projects with China
Recent Projects with
China include:
- Russia: Advised Rosneft, Russia's largest oil company, on property acquisitions in China to establish its presence in Beijing. Our role was in conjunction with the Moscow office of Chadbourne & Parke.
- Chinese gas pipeline project: Advising China National Petroleum Corporation, China's largest stage owned oil and gas enterprise on aspects of Chinese law relating to the Kazakhstan-China gas pipeline into China. Our role is in conjunction with our US affiliate Chadbourne & Parke.
- International client's hydrocarbons incident liability report (China): Advising tengizchevroil LLP (Chevron's Kazakhstan joint venture) on various regulatory and liability issues in connection with hydrocarbons incident liability under Chinese law.
- Coalbed Methane project - Henan Province: Advised client on its production sharing contract for the development of coalbed methane with Pingdingshan coal mine.
- Chinese IPOs in Australia: Currently advising on the Initial Public Offers (IPOs) on the Australian Stock Exchange (ASX) of two PRC-based manufacturing companies seeking to raise funds in the Australian market, one being an industrial power products company and the other a textile company, both of which are considered market leaders in their respective industries in China. Chambers and Company are working with Chinese law firm Allbright Law Offices, the largest law firm in Shanghai, on the IPOs through the mutual cooperation working agreement entered into by the two firms in early 2008.
- IPO restructuring for Sinosteel Corporation: Advising Sinosteel on the restructuring of the Sinosteel Group, including its Australian subsidiaries for its proposed listing on the Shanghai and Hong Kong stock exchanges. Our scope of work including advising on the transfer of ownership of Sinosteel Australia Pty Ltd to the new listing company for the purpose of the IPO, and seeking Foreign Investment Review Board approval for the group restructuring.
- Other Non Ferrous Projects: Advising a major Chinese state owned enterprise on its acquisition of a major equity in a publicly listed Australian company. The Chinese investment will be in the order of several hundreds of millions of dollars. The same Chinese state owned enterprise is also negotiating a Heads of Agreement to be entered into for the establishment of an unincorporated joint venture in another non ferrous industry which will make it the leading producer in that industry.
Other Projects
Over time, our firm's list of other clients on international projects has been very extensive and involved major international corporations.
The firms's other areas of practice include international and domestic projects, construction and engineering projects, international trade and investment law, mergers and acquisitions and banking and finance.
As to our general corporate practice, our legal experience has involved extensive due diligence, corporate law analysis, negotiating and drafting of legal documentation, government approvals and corporate compliance advice. Our senior partner, Robin Chambers, has been a director of around 50 corporations in Australia and elsewhere and has acted as legal counsel over a long period of time advising the directors of corporations on the whole range of corporate law matters in Australia.
Other Major Matters
- BHP / Rio Merger: Our firm has been briefed by two major US private equity funds to provided ongoing advice and monitoring of the issues raised to buy this proposed merger. This included advice and legal commentary on the regulatory regimes being conducted by the Australian Competition and Consumer Commission and European Commission in cooperation with European lawyers. We were also invited to meet with one of China's steel mills in China to advise on possible divestment opportunities which have become available when the European Commission hands down its decision. The full extent of Chinese involvement is still work in progress.
- Australia China Resources Fund: Advising on Australian Foreign Investment Review Board requirements for the establishment of a US$1 billion Resource Fund where the majority of investors expected to invest into the Australian resource projects and companies will be from China.
Summary
In summary, the core competencies/differentiation of our lawyers and our firm are as follows:-
- Advised on many of the major mineral resources joint ventures negotiated in Australia over the past 25 years for Rio Tinto and BHP-Billiton and other international clients;
- In-depth experience on all aspects of involvement in the development of the Australian resources industry since the early 1970s;
- Advised on mineral resources projects in more than 30 countries;
- Our special expertise in mineral resources projects in Australia involving Chinese participants;
- Our valuable intellectual property covers not only negotiating and documentation skills, but also critical project management, commercial skills and delivery expertise;
- Our reputation and contacts to facilitate government support and approvals at both the state and federal government levels in China and Australia;
- Our intelligence network and past corporate expertise enable us to understand the important political and cultural structures in Australia to facilitate these negotiations; and
- The "big brother" backing and support from our US affiliate, Chadbourne & Parke LLP, accessing their global data and precedent bases and network.