China Investment Corporation (CIC), the country's largest sovereign wealth fund, is currently striving to expand its overseas resource and infrastructure sector layout. Recently, CIC-participated Teck Resources Limited (TSX: TCK/NYSE: TCK) quietly purchased a 2.9% stake in Fortescue Metals Group (FMG), Australia's third-largest iron ore producer, on the secondary market.
According to informed sources, Teck Resources has been tracking FMG for many years and listed it as a potential acquisition target; CIC also attempted to directly acquire shares in FMG but has not succeeded so far. Additionally, the Eruu Gol iron mine project in Mongolia, in which CIC invested a few years ago, is once again initiating an IPO in Hong Kong. Another ongoing investment negotiation by CIC is also resource-related.
On February 15th, Steve Wood, Director of the Western Australia Development Commission, revealed in Perth that the National Development and Reform Commission (NDRC) had discussed with CIC last September about investing in the OPR infrastructure project in the mid-western magnetite mining area of Western Australia, but no investment decision has been made yet. According to the latest feasibility report of the OPR infrastructure project, the total cost is 5.94 billion Australian dollars (approximately 39.8 billion RMB).
CIC's multi-faceted layout in resources and infrastructure sectors is closely related to its current investment strategy. On February 14th, Lou Jiwei, Chairman of CIC, stated during the attendance at the 2012 Annual Meeting of the Forum of China's Top 50 Economists, "Investing in infrastructure and industries can not only yield relatively stable returns but also meet current world demand, helping to promote economic recovery."