Opposition leader slams Rio deal

Malcolm Turnbull says Rio Tinto deal against national interest.

The Federal Opposition leader has slammed Chinalco’s plan to invest a major stake in Rio Tinto as going against the national interest.

Malcolm Turnbull urged the government to reject Chinalco’s bid to invest $26.7 billion in Rio in a speech to the Lowy Institute on Friday.

He said the government should reject the deal because it would create a conflict of interest by allowing the Chinese company to acquire considerable influence in a leading producer.

“This will give the Chinese government the seat of greatest influence and access to information about production, costs, pricing and marketing strategies of our second largest resource company,” he said.

The deal will see a $30 billion cash injection from Chinalco to increase its stake in Rio Tinto from 11% to 18%.

Turnbull also criticised the government for being inconsistent in its relationship with the China and said China should privatise its state-owned enterprises so they can operate independently of the government.

“Australia’s national interest is to ensure that the control of its major natural resource assets remains in the hands of companies that will pursue the development of those assets in a way that will maximise the economic returns for Australia,” he said.

The decision is currently before the Foreign Investment Review Board (FIRB), and is subject to further approvals.

The FIRB is studying the deal and will make a recommendation to Treasurer Wayne Swan, who can accept or reject its findings.

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