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Rio deal can help Australia: Chinalco boss
Sydney (AFP) March 2, 2009 Chinalco's proposed 19.5 billion US dollar investment in Rio Tinto could help Australia fend off the global financial crisis, the Chinese firm's president said Monday. Visiting Australia to sell the deal, Chinalco president Xiong Weiping also sought to ease concerns about a state-owned Chinese entity taking such a huge stake in the country's resources assets. If approved, the deal will be China's largest ever foreign investment, widely seen as a move by Beijing to secure more control over the raw materials that have driven the Asian giant's industrial expansion in recent years. But Xiong said there were also benefits for Australia, estimating the plan would see more than seven billion US dollars directly invested in the country. "Hopefully the deal will be beneficial to Australia in terms of helping it withstand the impact of the global financial crisis and to its economic recovery," he told reporters. Xiong will meet officials from Australia's foreign investment regulator in Canberra later Monday and is also expected to hold talks with Treasurer Wayne Swan before returning to China on Wednesday. A number of politicians have expressed disquiet at the prospect of Beijing exerting increased influence over Australia's strategically-important resources but Xiong said Chinalco operated independently of the Chinese government. In turn, Rio Tinto would remain independent of Chinalco if the deal proceeded, he said. "Although we are a state-owned enterprise, ever since we were established we have run as a separate and independent commercial enterprise," said Xiong. "In this transaction, Rio remains as an independent company. Our partnership in no way changes the corporate strategy of Rio or how it operates its business or pricing of its product." "This transaction in no way leads to any control of natural resources in Australia." The deal needs approval from both the Australian government and Rio Tinto shareholders, both of which could prove a challenge. Australia announced changes to foreign investment laws just moments after the Rio-Chinalco deal was unveiled last month and treasurer Swan said Monday he would not be rushed when evaluating the merits of the proposal. "This is a very significant decision, the government will take its time to evaluate it in great depth and detail," he said. "It's very important we get this right in the national interest." Xiong did not want to implement changes to the package thrashed out between Rio and Chinalco. "We think this represents the best outcome that is acceptable and agreeable to both parties," he said. Share This Article With Planet Earth
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