Vancouver Globe and Mail Update Published on Monday, Feb. 08, 2010 8:15PM EST
Last updated on Tuesday, Feb. 09, 2010 6:49AM EST
.China Investment Corp., the Asian economic superpower's hulking $200-billion (U.S.) sovereign wealth fund, has been quietly accumulating stakes in resource firms including Canada's Kinross Gold Corp. (K-T18.800.935.20%) and Potash Corp. of Saskatchewan, (POT-T113.103.763.44%) according to a filing with securities regulators.
CIC, whose chairman is former Communist Party of China insider Lou Jiwei, has spent billions of dollars on mining and energy related investments, the filing with the U.S. Securities and Exchange Commission reveals. China is the world's largest commodity buyer and part of the fund's mandate is to invest directly in materials producers to offset China's costs.
The regulatory disclosure also shows that CIC has turned an impressive profit on the $1.5-billion it invested in debt-laden Teck Resources Ltd. (TCK.B-T36.271.775.13%) last July.
The filing shows that the stake in the Vancouver base-metals miner was worth $3.5-billion by the end of 2009, making it CIC's largest single equity holding.
The list represents the most detailed holdings information of North American equities ever revealed by the Chinese sovereign wealth fund.
CIC has become one of the world's largest and most important investors as China's economic influence has increased. The fund is allocated a portion of China's $2.4-trillion worth of foreign exchange reserves to invest overseas.
Resources are a primary focus of the fund's holdings, the filing shows. In addition to its $3.5-billion interest in Teck, CIC has a $652-million stake in Brazilian iron ore and nickel giant Vale SA, a $4.7-million interest in copper miner Freeport-McMoRan, and a $9.1-million holding in steel producer ArcelorMittal.
A $4.6-million stake in Toronto-based Kinross appears to be CIC's largest single exposure to a gold mining company. The fund also holds $155-million worth of SPDR Gold Trust shares, a bullion-backed exchange-traded fund.
CIC also revealed it owns 50,000 shares of Potash Corp. worth $5.4-million. China has become a key customer of potash, which is used to make fertilizer, as it moves to improve crop yields and increase the amount of meat consumed by its citizens. As well, CIC disclosed holdings of $5.1-million in U.S. natural gas producer Chesapeake Energy Corp.
The comprehensive disclosure of the fund's holdings comes amid speculation that CIC will be allocated more money to invest by China's government as the country's foreign exchange holdings continue to grow.
Mr. Lou recently said that CIC would focus on investing in emerging markets in 2010. In October, the CIC chairman said the fund had allocated $110-billion for foreign investments and had already deployed about half of that.
In addition to metals and materials, the SEC filing also shows for the first time that CIC has acquired stakes in a number of high-profile brand name companies in North America.
The regulatory filing shows CIC controls 15,000 shares of BlackBerry maker Research In Motion Ltd. worth about $1-million. CIC also owns a $6.3-million stake in computer and hand-held device maker Apple Inc., and a $4.3-million interest in News Corp., publisher of The Wall Street Journal and owner of Fox News. The filing also revealed for the first time that CIC owns a $14.3-million interest in troubled U.S. insurer American International Group Inc.
