MercoPress, en Español

Montevideo, March 28th 2024 - 18:27 UTC

 

 

Rio Tinto decision was not “political” Australia assures Beijing

Saturday, June 6th 2009 - 14:01 UTC
Full article
Australian PM Rudd had to reassure that “Chinese investment is welcome” Australian PM Rudd had to reassure that “Chinese investment is welcome”

The Australian government reassured China on Saturday that miner Rio Tinto's decision to walk away from a 19.5 billion US dollars by investment by Beijing was not a political move.

Rio Tinto announced on Friday it was pulling out of the deal that had sparked political and shareholder opposition and would instead raise capital from existing shareholders and forge a joint venture with arch rival BHP Billiton.

'It's a commercial decision that has been taken by the companies,' Australian Treasurer Wayne Swan told state radio on Saturday, adding that the move would not harm Chinese-Australian business ties.

'Chinese investment is welcome in this country, I have made that clear with the Chinese, as has the prime minister,' he added after Rio's decision to scupper its agreement with Chinese state-owned aluminium miner Chinalco.

Rio Tinto's announcement saved the government from having to make a politically sensitive decision on whether to grant regulatory approval to the deal, a decision that would have had to be made within the next week.

The landmark deal between Chinalco and the debt-laden Anglo-Australian firm would have marked the largest Chinese investment abroad and the largest foreign investment in Australia.

Mr Rudd held a hastily arranged meeting with Chinalco chairman Xiong Weiping late on Friday night during which he also stressed that Rio Tinto's decision was its own.

'The prime minister explained that Australia welcomed foreign investment,' a spokesman for Mr Rudd was quoted as telling The Sydney Morning Herald.

Asked whether the collapse of the Chinalco investment would anger the Chinese, Mr Rudd stressed that the decision was taken by Rio, not his government. 'And I think it is very important that our friends in China recognise that fact,' he said.

Rio shareholders and opposition politicians had spoken out against the Chinalco deal saying it risked allowing China - Australia's main resources customer - to control the pricing of the minerals it buys.

Rio opted instead to walk away from the deal and form an iron ore joint venture in Australia's mineral-rich Pilbara region with rival BHP and to raise capital through a 15.2 billion rights issue.

Top Comments

Disclaimer & comment rules

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!