Alcoa said on Feb. 12 it was pulling out of a joint venture with China's state-owned Chinalco that had been established to buy a stake in Anglo-Australian mining giant Rio Tinto. Alcoa will receive $1.02 billion for the stake plus dividends from the venture called Shining Prospect.
The U.S.-based firm, one of the biggest aluminum makers, said it would continue to work with Chinalco and would "explore opportunities to expand their commercial relationship by identifying strategic ventures."
But Alcoa will cash out its investment in the Rio Tinto venture, which had been announced hours earlier by the Chinese firm. Selling the stake "strengthens Alcoa's ability to weather the economic downturn," said Klaus Kleinfeld, Alcoa CEO. "When the global economy recovers, the pent-up consumer and industrial demand will create a broad array of opportunities in both developed and developing regions for Chinalco and Alcoa."
Chinalco earlier unveiled Beijing's biggest investment ever in a foreign company, putting $19.5 billion into the troubled Rio Tinto.
But the move, which would give China more leverage over the resources and raw materials that have fueled its economic boom, immediately hit an apparent snag as Australia announced plans to amend its foreign investment laws.
Copyright Agence France-Presse, 2009