CIC pays US$1.5b for stake in Teck Resources

Resourceful indeed. The Chinese ship of state has accelerated to ramming speed in its search for global resources. The latest move: sovereign wealth fund China Investment Corp (CIC) will spend US$1.5 billion for a 17.2% stake in debt-laden Canadian mining and processing company Teck Resources. Teck is Canada’s largest mining, mineral processing and metallurgical company with interest in 15 mines in the Americas and exploration activities on four continents. CIC will get a 6.7% voting share in Teck but no board representation. Meanwhile the game of chicken continues between China’s iron ore buyers and suppliers after China rejected a 33% price reduction offered by Rio Tinto. This puts Chinese buyers at risk of having to pay higher spot prices, compared to South Korean and Japanese firms who accepted Rio’s offer. Finally, China is taking yet another step to lessen its dependence on coal, with plans to build a US$17.6 billion wind power farm in Gansu province. The farm would have an installed capacity of 20 GW by 2020, leading some to call it “The Three Gorges Dam on land.” The nickname still needs some work.