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Alcoa and Chinese Rival Buy 12% Stake in Rio Tinto - New York Times - 0 views

www.nytimes.com/...02mines.html

chinese ALCOA YADKIN GOINGOUT

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  • SHANGHAI — The state-owned giant Aluminum Corporation of China and the Aluminum Corporation of America stunned analysts and investors Friday by buying a minority stake in Rio Tinto, the world’s third largest mining company.
  • “The Chinese are probably the best capitalists that communism will ever have given birth to,” said Michelle Applebaum, head of an independent steel equity research firm in Chicago.
  • Last year, China’s state-controlled sovereign wealth fund — another increasingly visible and controversial measure of the new wealth of the nation — invested in the private equity firm Blackstone. Later, it paid about $5 billion to buy a small stake in Morgan Stanley.
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  • Now, China appears to be making another bold play to capture the natural resources it needs to fuel its fast-growing economy.
  • Most of the $14 billion came from Chinalco, which is ultimately controlled by the government in Beijing. Alcoa, which is based in Pittsburgh, contributed only about $1.2 billion to purchase the Rio stake.
  • "We believe that the Chinese recognize that control will likely be elusive — if not impossible — and that ownership of its raw material resources is key to the future.”
  • The statement, analysts say, was a hint that the two could team up with other companies or entities, possibly from China, to bid for all of Rio and wage a tough takeover battle with BHP, driving up the price of Rio shares.
  • partly because of suspicions that the Chinese government could be behind the deal.
  • Neither Chinalco nor Alcoa have the cash or stock to make a $150 billion bid, analysts say. Shares of Alcoa are worth about $30 billion and Chinalco shares in China are worth about $50 billion.
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Alcoa Fights Back: Further Developments in M&A - Mining Technology - 0 views

www.mining-technology.com/...feature1875

CHINA YADKIN ALCOA GOINGOUT RIO

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  • They reproduced a letter from one such hedge fund, Jana Holdings, which read: "Given Alcoa's long history of failing to generate shareholder value through acquisitions, we believe that its greatest value can be realised through a sale or break-up of the company." "Marketplace valuations on reserves and resources are ridiculously cheap across the mining commodity spectrum," says Renken. "Hence the pressure on Alcoa's board to 'make things happen' corporately to get a better valuation on their own shares."
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      Yadkin River on 19 Dec 11
       
      DID THE CHINESE SAVE ALCOA ?
Yadkin River

The Jamestown Foundation: China Makes Strides in Energy "Go-out" Strategy - 0 views

www.jamestown.org/...single

china goabroad GOINGOUT yadkin Alcoa

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  • Yet this new strategy is taking the shape of a formula of “loans-for-energy,” which involves a mix of state-owned and private actors.
  • hese complex arrangements indicate that China’s expansion of overseas-energy assets is a long term goal and that it is increasingly interested in securing Chinese outward investments from its international partners.
  • Put more of China’s $2 trillion foreign reserves into hard assets -- Zhang Guobao, vice minister of the National Development and Reform Commission and head of the NEA, had pointed out in a signed article published in December 2008 in the People’s Daily (a strong indication of being authoritative statements of government policy) that China should seize the timing of the oil price slump on the  international market to increase imports and Chinese enterprises are encouraged by the government to expand overseas (China Daily, March 9).
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  • his model is more in line with the Chinese government’s preference for financing acquisitions, since it gives Chinese NOCs direct ownership of resources. In contrast to the other three deals, Chinese NOCs could only extend loans to foreign NOCs for guaranteed oil supplies or possible special access to future exploration projects.
  • China’s new venture with Kazakhstan deviates from the “oil-for-loans” formula. The $5 billion loan from CNPC will give Chinese oil firms a 50 percent stake in the joint purchase of MangistauMunaiGaz (MMG), Kazakhstan’s biggest private oil and gas company (Reuters, April 17). This deal is more like a “loan-for-oil assets” transaction than one of “loan-for-promised-oil supply," which characterizes the previous three contracts, and CNPC will receive half of the oil that will be produced by the jointly owned MMG (the other 50 percent will be owned by the Kazak state-owned firm KazMunaiGas).
  • he global economic crisis has presented China with a rare opportunity to trade its abundant foreign currency reserves for oil, mineral and other resources around the world. China now has roughly $2 trillion in foreign exchange, ranking number one in the world, and many state firms are also flush with funds (The Associated Press, February 18). Beijing is considering setting up an oil stabilization fund to support purchases of overseas resources by Chinese oil companies. The plan was submitted at NEA’s National Work Conference on Energy held in March 2009 (Xinhua News Agency, March 2).
  • The recent large energy activities are not the first time Chinese NOCs have entered “loans-for-oil” deals. In 2004, Chinese banks financed Rosneft’s acquisition of Yuganskneftegaz with a $6 billion loan and CNPC received a pledge of long-term supply contracts via rail in exchange (Platts Community News, February 19)
  • These “loans-for-oil” activities will remain an active component of the Chinese overseas resource acquisition strategy given the current global economic and energy conditions.
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Alcoa Gets Deeper Into China With New Joint Venture - Forbes - 0 views

www.forbes.com/...o-china-with-new-joint-venture

ALCOA CHINA GOINGOUT GOOUT YADKIN

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  • Alcoa Gets Deeper Into China With New Joint Venture
  • he JV will focus on the technical expertise of both the companies to leverage this growing market.
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