Hunan Valin Iron & Steel on Tuesday agreed to buy a 16.5% stake in Australia’s third-largest iron ore producer Fortescue Metals for US$771 million, the Financial Times reported. The deal marks the latest in a series of investments by state-owned Chinese firms in debt-laden Australian resources companies such as Rio Tinto and OZ Minerals. China’s sovereign wealth fund China Investment Corp is also said to be considering an investment in Fortescue. Hunan Valin purchased 225 million new shares in Fortescue at A$2.48 (US$1.61) per share, and 275 million shares from two Harbinger Capital funds for a combined 16.5% stake in Fortescue. Under the terms of the deal, Hunan Valin also has a "standstill agreement" that prevents it from raising its stake in Fortescue above 17.5%. The deal is subject to regulatory approval in Australia and China.