Australian Greens, the political party dedicated to conservation and responsible environmental management and caring for the planet, has vehemently opposed the Rio Tinto-Chinalco $19-5 billion deal because of China's poor human rights records.
Greens leader Bob Brown said that the proposed Chinalco's purchase and control over major Australian resources raises major political questions.
Last week, China's state-owned Aluminium Corporation of China (Chinalco) said that it will invest $19.5 billion into debt-ridden mining giant Rio Tinto, in a deal that would give China more leverage over the resources and raw materials to fuel its economic boom. (See: Chinalco invests $19.5 billion in Rio Tinto to raise stake to 18 per cent)
Under the deal, Chinalco would invest $12.3 billion to acquire stakes in some of Rio Tinto prized assets in aluminium, bauxite, copper and iron ore projects and buy $7.2 billion in bonds that would convert to Rio shares at a later date.
Rio Tinto has stockpiled $39.1 billion debt accrued mainly from its acquisition of Canadian Aluminum company Alcan for $38.1-billion and now has to reduce its debt by $10 billion by next year with $8.9 billion due in October 2009 and an additional $10 billion the following year.
The deal at the moment has been widely opposed by Rio Tinto's shareholders, investors, rival mining giant BHP Billiton, as well as the Australian Government, which amended its foreign acquisitions act just minutes before the miner announced the deal. (See: Chinalco-Rio Tinto deal may run into rough weather)
"This nation should not vest power over its future resource management in the hands of the brutally repressive Beijing bosses. If Rudd or Swan want convincing, they might visit Tibet and see how that once-independent country's mineral wealth is directed," Senator Brown said.
"There is a real danger of Chinalco's bid to control Rio Tinto today extending to the control over roads, public transport or privatised water corporations in Australia tomorrow," Senator Brown said.
The chairman of the Chinese government's $307 billion sovereign fund, China Investment Corporation, has reportedly met with the Treasurer to discuss whether China could help fund the Rudd government's infrastructure program.
"Where is the dividing line? Where is the Foreign Investment Review Board's guidelines on whether the purchase of Australian assets will assist the torture of Buddhist monks or sentence peaceful proponents of democracy to hard labour in the Gobi desert?" Senator Brown asked.
"I note Treasurer Swan's comment that the government will need to legislate to ensure that Chinalco's potential investment in convertible bonds is subject to foreign investment laws. That means this whole issue will be subject to the Senate having a say," Senator Brown said.
Swan, who is the Australian Federal Treasurer, in charge of approving foreign acquisitions, admitted that he had held talks with the head of China's sovereign wealth fund about Chinese investment in Australia.
But he said that in the course of business dealings, he holds several such talks with business people from all over the globe, whether they are from China, Japan or elsewhere, but any foreign investment will be approved only if it met with the country's national interest.