It is reported that China's biggest nickel refiner, Jinchuan Group, deepened its investment in Australian mining recently agreeing to pay USD 15.5 million for 11% of Fox Resources Ltd as it chases access to raw materials.

China's government has encouraged its state owned metals and mining firms to consider foreign takeovers as a way of securing raw materials for the world's fastest growing big economy.

Mr Keith Goode Eagle Mining Research analyst said "Chinese firms are looking very closely at Australian mining companies. He said this year appears to be heading for a year of M&A activity, especially among the junior Australian metal producers, with possible premiums of 35% to 40% being paid."

Jinchuan paid AUD 0.95 a share for the Fox stake a 14% premium to the company's last closing price, sending its shares up 10% on speculation of a full takeover.