Chinese buy into Victorian company

Chinese investment company CITIC has taken a 13 per cent stake in Alumina for $452 million, sending shares in the Victorian-based investment company skyrocketing.

In a statement Alumina said the new funds would be used to repay bank debt, which it aims to reduce from $658 million to $208m.

The company said CITIC would be a “financially strong long-term investor” and a director of the state-owned Chinese group would be appointed to the board.

Alumina is an Australian company that invests in global bauxite mining and alumina refining and smelting operations.

The company owns aluminium smelters in Portland and the struggling Point Henry plant, both in Victoria.

It also owns a 40 per cent stake in Alcoa World Alumina and Chemicals.

Analysts said because CITIC held a minority share in Alumina it could not move toward controlling the company's assets.

Global demand for aluminium has been lagging for several years, and analysts said the Chinese investment was part of a counter-cyclical strategy.

In a statement Alumina CEO John Bevan said CITIC's investment demonstrated its “confidence in the alumina industry”.

“CITIC has a long history of investment in the metals and mining industry in Australia,” he said.

“CITIC's first Australian investment was in the AWAC joint venture's Portland Aluminium Smelter in 1986 and it now owns a 22.5 per cent stake in the smelter.”