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Chinalco deal gets initial nod

By Jiang Wei (China Daily)
Updated: 2009-03-26 07:48

Aluminum Corp of China (Chinalco) yesterday got an initial go-ahead from the Australian government for its $19.5-billion investment into the Rio Tinto Group.

Related readings:  Australia competition body won't block Rio-Chinalco  Australia delays call on Chinalco-Rio deal  No changes to Rio Tinto deal: new Chinalco chief  Rio Tinto shareholders wary of Chinalco deal

The Australian Competition and Consumer Commission said in a statement on its website that it does not oppose the proposed acquisition by Chinalco in Rio Tinto.

"It would be unlikely to result in a substantial lessening of competition," it said.

The commission said the stake buy was not likely to affect the iron ore, copper, aluminum and bauxite markets as "there was limited direct competitive overlap of the operations of Rio Tinto and Chinalco".

Chinalco proposed last month to invest $12.3 billion to buy stakes in Rio Tinto's mines, including iron ore, bauxite, aluminum and copper projects, and another $7.2 billion to buy its convertible bonds.

The proposal has to be approved by other Australian government agencies and Rio Tinto shareholders as well.

Chinalco welcomed the commission's decision, saying it "looked forward to moving ahead with the transaction".

Australia's Foreign Investment Review Board, which is also reviewing the proposed deal, decided last week to extend its investigation into the planned acquisition by 90 days. It will provide a recommendation to Treasurer Wayne Swan, who will make a final decision on whether the deal is in Australia's national interest.