LONDON (AP) -- Mining company Rio Tinto Group said Wednesday that German regulators have approved the proposed $19.5 billion investment by China's state-owned Chinalco, a deal that still must clear regulatory hurdles in several other countries.
London-based Rio Tinto said the German Federal Cartel Office has found no anti-competitive element to the proposed investment by the Aluminum Corp. of China, the company's full name.
But regulatory authorities in China and the United States, as well as the Australian government where both Rio Tinto and Chinalco both have substantial operations, still must approve the investment. Some analysts complain that an increased Chinalco stake in Rio Tinto could give the company too much influence over the world pricing of iron ore.
Chinalco offered Feb. 12 to invest $12.3 billion in joint investments in aluminum, copper and ore mining with Rio Tinto, and to spend $7.2 billion on convertible bonds in the company. If redeemed for shares, the bonds would almost double Chinalco's existing 9.3 percent stake in Rio Tinto Group to 18 percent.
The Anglo-Australian miner's board has backed the deal, which would reduce its $40 billion in debt, mostly attributable to its purchase of Canadian aluminum producer Alcan Inc. in 2007.