18 Feb 2013

Chinese mining investment on the rise

7:23 am on 18 February 2013

Chinese investment in the Australian mining industry is on the rise again.

Alumina Limited is an Australian company with a 40% stake in the world's biggest alumina business.

Alumina is mined from bauxite deposits and is the key component of aluminium.

Radio New Zealand's Sydney correspondent says the problem for Alumina the company is that prices of raw material have been falling due to excess global supply.

Now, CITIC, the state investment company in China, has come to the rescue by spending nearly $A500 million for a 13% stake in Alumina.

The price of the Australian company's stock shot up 15% on the news amid speculation of a full takeover.

Citic is already a substantial investor in Australia and owns a 22.5% stake in the Portland aluminium smelter in Victoria.