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The Aluminum Corp. of China (Chinalco) could bid for a majority stake in London-based mining conglomerate Rio Tinto Group should a third company attempt a Rio Tinto takeover, a Stratfor source close to the Australian government said Feb. 18. Beijing appears set on blocking an attempt by the world’s largest mining company, Australia’s BHP Billiton, to swallow up Rio Tinto — a move that would create a mining goliath worth nearly $350 billion.
Chinalco and U.S.-based Alcoa Inc. joined forces Feb. 1 to purchase 12 percent of Rio Tinto for an estimated $14.05 billion. It is unclear exactly how much more of a stake the Chinalco-Alcoa consortium would be willing to buy — and at what price — to counter BHP Billiton’s bid. The highest stake rumored until now has been up to 20 percent.
Considering that domestic energy security tops the Chinese government’s agenda, it is a given that Beijing is looking to carve out a niche in the world’s key resource sectors using state-owned energy companies. Chinalco’s interest in Rio Tinto, therefore, is consistent with Beijing’s efforts to snap up global energy assets.
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