Sovereign wealth fund eyes security of raw materials

Updated: 2011-05-18 08:20

By Eva Woo (China Daily)

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BEIJING - The managing director of China Investment Corp (CIC), the nation's sovereign wealth fund, is moving to Canada to bolster the company's attempts at investing in natural resources, according to a company official with direct knowledge of the matter.

The director, Winston Ma, who is part of the special investments department at the corporation, was appointed deputy head of the fund's only office outside China this month, according to the executive, who asked to not be indentified. Wu Xueling, a spokeswoman for CIC, didn't answer two calls to her mobile phone.

Chinese companies have bid $25 billion this year for overseas natural gas, copper and other natural resources in the hope of securing the energy and raw materials by the fastest-growing large economy in the world.

Last month, Xia Bin, a central bank adviser, advocated using China's more than $3 trillion in foreign exchange reserves, some of which have been directed to CIC, to secure the resources the nation requires.

Ma's move will "help (the corporation) to collect more information on the ground from Canada, where natural resources, from commodities to water, are becoming increasingly popular among global bidders", Nick Zeng, chairman of the China Mining Association of Canada, said on Tuesday from Beijing. "But the major barriers to getting deals done could be the different cultural backgrounds and growing competition from US bidders."

China Investment Corp is the fifth-biggest sovereign wealth fund in the world, having assets worth $332.4 billion, according to the Sovereign Wealth Fund Institute.

And China's SAFE Investment Co manages $347.1 billion in assets, the fourth-largest amount in the world, the research company said.

Ma, 37, will report to Felix Chee in Toronto and to China Investment Corp officials in Beijing as he looks for good opportunities to invest in energy assets and agricultural commodities, the executive said.

Chee, who was a special adviser to the chief investment officer of the corporation, was named chief representative of the $300 billion fund's Canadian office in January, according to a statement on its website.

China Investment Corp's special investments department has taken part in a variety of deals related to the energy industry.

One entailed a $1.5 billion investment in the Canadian mining company Teck Resources Ltd in July 2009 and another a $1.58 billion investment in the US power company AES Corp in November 2009, according to the fund's website.

In November, the corporation said it had set up a subsidiary in Hong Kong, its first unit outside the Chinese mainland.

Bloomberg News


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