Ads in Australia Oppose Rio-Chinalco Deal

SYDNEY -- Australian political opposition to a proposed US$19.5 billion investment by Aluminum Corp. of China Ltd. in Anglo-Australian mining giant Rio Tinto Ltd. was raised to a new level Saturday as two prominent members of the upper legislative house launched a joint advertising campaign calling for the ruling Labor government to block the deal. The move will have little influence on whether the proposed tie-up gets approval from the Australian government, because that decision lies solely with Treasurer Wayne Swan. But it could signal wider discontent among politicians about a wave of proposed Chinese investments in Australian companies. Nick Xenophon, nonparty senator from South Australia, and Barnaby Joyce, the leader of the National Party in the Senate, jointly filmed a television commercial calling on the Australian government to block iron-ore-asset sales to what they describe as "foreign governments." "This isn't about stopping a takeover by a foreign company, this is about a takeover by a foreign government. As a nation we must protect our key strategic resources," Mr. Xenophon said in a statement. Businessman Ian Melrose is funding the publicity campaign. The ads come just over a week after the official opposition called on the government to block Chinalco's proposed investment in Rio, citing national interest grounds. The Rio deal would give Chinalco as much as an 18% stake in the Anglo-Australian miner as well as direct stakes in a number of its mines. Friday, the treasurer approved an application by China's Anshan Iron & Steel Group Corp. to buy a stake of as much as 36.28% in Australia's Gindalbie Metals Ltd., subject to certain conditions.