SYDNEY, Australia: Wei Zhang, chancellor to China's seventh-century Emperor Tang Taizong, reputedly told his master to "use history as a mirror." China's modern-day minerals mandarins could benefit from this advice as they look to secure supplies through investments in Australia and elsewhere.

China has long favored Australia's resource sector, never more so than last year when cash-strapped Aussie miners sought Chinese funds to stay afloat. But while the economic benefits to both parties seem undeniable, the execution has been largely unsuccessful, with two high-profile cases demonstrating the uneasy path Chinese investment faces Down Under.

Australia, one of the world's top exporters of iron ore and other commodities, has ridden out the economic downturn better than most, thanks in part to its proximity to China. But the financial crisis and steep drop in commodity prices in late 2008 and early 2009 had a major impact on miners.

"For the first part of the year companies would have to sell their souls to get financing, and banks were calling in loans because a lot were expiring in 2009," said...