A Chinese company has succeeded in the biggest-yet takeover bid of an Australian firm in a move seen as an exploit amid bitter investment relations.

The Australian authorities on Friday approved the 3.5-billion-dollar bid by China's Yanzhou Coal for mining giant Felix, AFP reported.

Felix produces about 4.8 million metric tons of coal a year.

The Chinese enterprise would be running its Australia-based mines through an Australian company.

"The Australian Securities Exchange listing of all of Yanzhou's Australian assets ... is a significant development," Australia's Assistant Treasurer Nick Sherry said in a statement.

"It represents the first time a Chinese state-owned enterprise operating in Australia will list on our stock exchange," he added.

"As such, it demonstrates the strength of the developing bilateral economic and investment partnership between Australia and China," Sherry said.

HN/SS/MMN