The Aluminum Corporation of China (Chinalco) and the U.S.
aluminum producer Alcoa bought a 12 percent stake in the
Britain-listed company of iron ore giant Rio Tinto on Friday, the
biggest ever stock trading case in value.
The total price of the acquisition stood at 14.05 billion U.S.
dollars, the largest overseas investment ever made by a Chinese
enterprise, Xinhua learned from Chinalco on Friday.
Sources from Chinalco told Xinhua that a large portion of the
total investment came from the Chinese side, but they declined to
elaborate.
Lu Youqing, deputy general manager of the country's top
non-ferrous metals producer, said that the deal was a "significant
strategic investment" by Chinalco and the company saw good
prospects for the fast-growing mining industry and the value of Rio
Tinto.
The partnership with Alcoa, the world's leading aluminum
producer, demonstrated that Chinalco was accelerating its plans to
go international, Lu said.
Alcoa Chairman and Chief Executive Officer Alain Belda said in a
statement on the company's website that Rio Tinto "has a
world-class portfolio of assets and is very well-positioned to
prosper in the current mining cycle."
"This investment, made in partnership with Chinalco, allows us
to mutually benefit from developments in the sector," said Belda.
"We have known Chinalco for many years, dating back to our
participation in the successful launch of Chinalco's [initial
public offering], and are looking forward to this new venture."
Chinalco said it made the joint acquisition through Shining
Prospect Pte. Ltd. (SPPL), its wholly-funded subsidiary in
Singapore.
Through its investment, Alcoa will acquire an equity stake in
SPPL commensurate with its cash contribution to the investment,
Alcoa said.
The China Development Bank was in charge of financial
arrangements for Chinalco, while financial consulting was provided
by Lehman Brothers and the China International Capital Corp. Ltd.,
according to Chinalco.
Chinalco has total assets of more than 200 billion yuan, with
revenue exceeding 130 billion yuan last year.
The company said that it was investing more overseas and
expanding its business from aluminum to other non-ferrous metals
like copper.
Founded in 1873 and headquartered in Britain, Rio Tinto is the
third-largest diversified mineral group. It became a leading
aluminum producer last year by acquiring Alcan, a Canadian-based
aluminum manufacturer.
(Xinhua News Agency February 2, 2008)
