There continues to be strong interest among Asian trading houses and resources companies to gain a slice of Western Australia's resources sector.
 
Corrs Chambers Westgarth partner Adam Handley has received multiple requests for assistance from Korean, Japanese and Chinese clients, looking to acquire gold, coal, uranium and iron ore projects in Australia.

"A range of factors, not least the falling Australian dollar, means that there are some very attractive M&A opportunities in the resources sector. Although much of the market speculation is on Chinese interests, we are seeing strong interest from Japanese and Korean investors as well," he said.

Although none of the deals can be made public at the moment due to confidentiality agreements, intelligence from Mergermarket supports Handley's claim that deals are in the making. Japan-based Sumitomo, Mitsui and Mitsubishi UFJ are all reportedly keen to invest in Australian mining operations. Analysts said they likely to target coal within the next year and Aquila Resources, Felix Resources and Gloucester Coal are possible targets. White Energy Company has confirmed its willingness to consider a takeover bid.

Some Japanese companies have large capital expenditure plans, such as Mitsubishi UFJ that plans to spend JPY750bn (US$8bn) on resources alone for the fiscal year ending March 2009.

Handley said the declining Australian dollar coupled with recent falls in key commodity prices, would ultimately result in bargaining power shifting in favour of acquirers. "There are many cashed up offshore clients with strong balance sheets that see the low Australian dollar presenting a unique opportunity to acquire some quality assets at bargain prices," he said.

Since the dollar is likely to remain weak it could mean that foreign investment in the energy & resources sector will remain active for the next 12 months.