Rio Tinto, the mining company with almost as many holes in its balance sheet as holes in the ground, upset some Australians when it established its headquarters in London following the 1995 union of RTZ and CRA. Now, rumblings Down Under suggest the Anglo-Australian mining giant is about to make an even more humiliating move: to Zhongnanhai, home of China's Communist party.
The swashbuckling decision by Chinalco, China's state-owned metals group, to lavish $19.5bn (€15.3bn, £13.5bn) on debt-burdened Rio has not provoked quite the nationalistic backlash set off by CNOOC's aborted takeover of US oil company Unocal. That is partly because Chinalco would end up with just 18 per cent of Rio, and partly because – in these straitened times – it is impolite to question the kindness of strangers bearing billions of dollars in cash.
Still, Chinalco's offer to buy $7.2bn worth of convertible bonds and to spend a further $12.3bn on minority stakes in Rio treasure – including iron ore, copper and bauxite mines – has been greeted by what one Chinalco advocate describes as “parochialism and low-level xenophobia”. Senator Barnaby Joyce of the opposition National party said: “The Chinese government involvement, via their vehicle Chinalco, is not a one-off.” Suggesting Chinalco's intentions were less than honourable, he added: “If they own the resources, they will just dig them up and cart them away.”