Swan Okays China’s Rio Tinto Stake
Australia’s Rudd administration has faced criticism for allowing Chinese companies to invest heavily in Australian mining and natural resource interests, and today approved another Chinese investment bid. From the Australian:
Wayne Swan has given approval for the Chinese government-owned mining giant Chinalco to acquire up to 11 per cent of the Rio Tinto group in the first high-profile test of the Rudd Government‘s stance on more than $30 billion of Chinese foreign investment bids.
The Treasurer’s foreign investment approval has the potential to complicate BHP Billiton‘s hostile $170 billion takeover bid for Rio, the world’s third-largest mining group. Mr. Swan approved a previously undisclosed application by Chinalco – which is 100 per cent owned by the Chinese Government – to take up to 14.99 per cent of the London-listed Rio Tinto Plc, equating to about 11per cent of the dual-listed company.
Mr. Swan, who advised Chinalco of his decision over the weekend, said it reflected his consistent statements that “Australia welcomes foreign investment, but only where it meets Australia’s national interests”.
But in a recent speech, Mr Swan made it clear there were limits to the stakes the Government would allow Chinese companies to take in Australian miners, particularly if they involved customers taking over the supply chain.