Investors of Australian iron ore developer Sundance Resources, along with industry experts, are keenly awaiting latest developments if the Perth-based miner will bite into a lowered takeover bid by Hanlong Mining of China.

On Wednesday, Hanlong Mining, which already owns 17 per cent of Sundance Resources, announced China has approved its much-delayed takeover bid for the Australian iron ore miner. But the good news ended there because the approval to proceed that Hanlong Mining received from the National Development and Reform Commission (NDRC) on Monday was a provisional approval on condition it lowers its earlier offer price.

That very night, Sundance Resources pondered heavily reviewing the new proposed takeover bid, now soured to 50 cents a share from 57 cents a share, even though the latter price was already agreed in principle by the companies last October 2011.

The NDRC wanted the reduction on the basis of deteriorating market conditions, including in the iron ore sector.

The 7 cents a share price cut reduces the value of the Hanlong Mining's cash offer from $1.7 billion to about $1.5 billion, correlating to a 12.3 per cent drop.

The latest proposal is actually not new but a revert to the original price Hanlong Mining first offered in May 2011, which was eventually rejected by the board of Sundance Resources in July 2011.

At stake in the takeover bid is the $4.7 billion Mbalam iron ore project located on the border of the republics of Congo and Cameroon in western Africa. China is heavily eyeing the region's iron ore to help cut its dependence from Australia and Brazil. The Mbalam project includes a 510 km (320 mile) rail line and a deep water port. It is foreseen to produce 35 million tonnes of iron ore annually.

Should Sundance Resources approve the offer, Hanlong Mining will still need to source $4.7 billion to develop the project.

Shares of Sundance Resources are currently in a trading halt, but the Australian iron ore miner might turn it into a voluntary suspension while negotiations with Hanlong Mining continue. Its shares last traded at 33.5 per share.

Australia's Foreign Investment Review Board approved Hanlong's bid for Sundance in June.

Frenzied Chinese takeovers of Australian metals and mining assets reached the zenith at 40 deals worth $6.5 billion, according to Thomson Reuters data. But these have since declined. Bids exchanged so far this year cost only $522 million, prompting bankers and lawyers to comment that interest of Chinese companies in mining auctions have waned.

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