No ordinary investor

1 February 2008 By Una Galani Follow @ugalani

If the Chinese holding company behind the $14bn share raid on Rio Tinto was a sovereign wealth fund, it would top the BV SWF Risk index. It lacks transparency, takes controlling stakes in the semistrategic mining industry and is bankrolled by the Chinese government. Not good.

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Chinalco, a stateowned Chinese miner, has teamed up with US miner Alcoa to build a 12% stake in Rio Tinto's UKlisted shares, equivalent to 9% of its total value. The stake, worth around $14bn, was bought at £60 a share, according to people familiar with the situation a 20% premium to the closing price on Thursday.

Shining Prospect, the vehicle through which Chinalco and Alcoa have invested, said it had no intention of making a full bid for Rio, but reserved the right to do so under certain circumstances. One would be a formal offer for Rio from BHP Billiton, the rival miner that made an allshare approach to Rio last November.

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