Australia has backed Chinese aluminium giant Chinalco’s recent purchase of a 11 per cent stake in Anglo-Australian mining giant, Rio Tinto. Wayne Swan, Australian national treasurer, approved the purchase on condition that the Chinese government-owned Chinalco did not buy more shares in the company. The $14.05 billion ($7.6 billion) purchase, backed by a united States firm Alcoa, is China’s largest ever offshore investment.
China’s investments overseas have raised fears of politica; interference in strategically important industries. ”While Australia welcomes foreign investment in our economy, we will carefully examine national interest issues where these arise in relation to foreign sovereign ownership,” Swan said. He added that he has determined that the undertakings agreed with Chinalco are acceptable for protecting the national interest.
China agreed not to seek to appoint a director to the firm’s boards. China bought a 14.99 per cent shareholding in Rio’s London-listed company, which equates to an interest of around 11 per cent in the whole group which includes the Australian listed firm. Rio Tinto is also fighting off a hostile takeover proposal from BHP Billiton, the world’s largest miner. China fears that if the takeover were successful, the combined firms would have a stranglehold on the world’s supplies of iron ore and other raw materials..