DJ China Foreign Min: Chinalco’s Rio Tinto Stake A Mkt Decision

CANBERRA (Dow Jones)-China’s Foreign Minister Yang Jiechi said Tuesday Aluminum Corp. of China’s (ACH) decision to take a stake in Anglo-Australian mining giant Rio Tinto PLC (RTP) was a market decision, and wasn’t influenced by its Chinese government ownership.

'This is an independent decision made by the two companies (Chinalco and Alcoa), one Chinese and one American. They did it for their companies' own good and to do this would help the development of their business. It is part of the two companies' development strategy. It conforms with international practice and to market rules in terms of mining cooperation,' the minister told reporters in Canberra.

Aluminum Corp. of China, known as Chinalco, and U.S. heavyweight Alcoa Inc. (AA) stunned the market Friday with the announcement that they had jointly purchased 12% of Rio Tinto’s London-listed shares for $14.1 billion. The stake amounts to 9% of the company when its Australian shares are taken into account.

'(The Chinese government) just respects the company’s decision,' Yang said, adding that China and Australia 'have much trade in natural resources and it is a mutually beneficial relationship'.

The Chinese foreign minister is in Canberra for talks with his Australian counterpart, Stephen Smith.

Smith said Tuesday that ultimately the decision as to whether Chinalco’s stake in Rio Tinto is in Australia’s national interest rests with the country’s foreign investment review board and with Treasurer Wayne Swan.

He said Australia 'welcomes foreign capital investment', adding that bilateral trade with China has played a key role in Australia’s economic success in recent years.