Let me introduce the new boys in town: Chinalco and Alcoa
Along with yesterday's financial shock of Chinalco and Alcoa's combined 12% buy of Rio comes a little crystal ball viewing into the future of Rio Tinto.
Chinalco is the parent company of Chalco (almost 40% ownership) - yep, the same Chalco who currently own the Aurukun bauxite lease. Alcoa is the Aluminum Company of America.
These are big guns.
And they're aimed at Rio and BHP respectively.
Alcoa was once a favourite to own Alcan (Canadian Aluminium) but alas that trophy went to Rio for a $40billion opt in.
The significance of this new investment in RTA is bigger than most people truly understand. Alcoa is said to be only fronting just over a billion dollars in the new stake. So primarily we are seeing the arrival of the Chinese into the commodities market in a big way. Smaller scale investments have been made over the past few years, mainly into iron ore companies, but yesterday's buy marks a new dawn.
The 12% stake doesn't actually constitute a blocking stake in the sale of Rio to BHP as it didn't represent a 10% all Australian share buy. Rio is dual listed - Australia and London.
The implications of this new investment are wide-reaching. Management positions will definitely be reshuffled. The Rio and BHP boards will be feeling the heat this morning and will be wondering what the hell happened. But the signs of China's involvement have been obvious for several months.
What does this mean for you?
If you are a shareholder you will see a sharp spike in the price come Monday morning.
If you are a worker then one day in the not too distant future you may find yourself working for a large Chinese mining monolith ... digging up Cape York for Chinese car engines.
Welcome to the globalised world.
It's best for everyone ... apparently.
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Can anyone tell me PLEASE if the "1957 Commonwealth Aluminium Corporation Pty Ltd Agreement Act" will still apply if this does come to fruition. I see we don't uphold 1957 Safety rules so why are we still adhering to an Act some fifty years old when environmental concerns were nil. I fear for our unique place and this global thirst for its bounty. We must leave something of the original environment for future generations. Am I the only concerned person wanting this to happen? I am not a radical am I, wanting this small concession, surely some of you in the planning area have an environmental heart.
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