Posted on 19 Mar 2009
Aussie politicians intensify opposition to tie-up with Chinalco
Australian political opposition intensified against Rio Tinto Ltd’s planned US$19.5bil tie-up with
Senator Nick Xenophon joined the Greens and conservative National Party senator Barnaby Joyce in opposing the deal, as the Senate prepares later yesterday to call an inquiry into investments by sovereign wealth funds and state-owned companies.
“We should be selling the milk, not the cow, in this case the minerals not the mine,” Xenophon told Australian radio.
Under the deal, Chinalco will pay US$12.3bil for stakes in iron ore, copper and aluminium assets and US$7.2bil for convertible notes that would double its equity stake in
The deal itself cannot be blocked by the upper house Senate. It is being reviewed under
If foreign investment approval is given, Rio Tinto must then win the backing of shareholders.
Xenophon said he had real concerns about the Chinalco bid because it would give the state-owned group an important stake in a strategic industry.
“There is a real concern as to the implications for
Joyce, who is the National Party leader in the Senate, ran two television advertisements on Tuesday outlining his opposition to the deal, saying
Joyce has wide support for the Senate’s Economics Committee to hold an inquiry into foreign investment rules and the impact of investments by sovereign wealth funds and state-owned companies on business growth and competition.
The Senate was to vote on the inquiry later yesterday, with the committee due to report back by June 17.
