In a move to reduce debt, Canada’s biggest diversified mining company, Teck Resources Ltd, has sold a 17 percent stake to China Investment Corp (CIC) – China’s $200 billion sovereign wealth fund. 

The C$1.74 billion deal – which is CIC’s “first major investment” in a Canadian company - will give CIC a 6.7 percent voting interest and a 17.2 percent in equity interest in Teck; after the purchase of 101.3 million Class B subordinate voting shares of the company for C$17.21 each.

Talking about the sale of assets, the Vancouver-based Teck said that the proceeds of the share will be used by the mining company to reduce its bank debt. It added that last year, the company had added $9.8 billion of loans for the purchase of Fording Canadian Coal Trust, a producer of coal used in steelmaking.

Teck further said that the CIC transaction “represents an attractive opportunity for Teck to establish a relationship with a major Chinese financial investor, with a deep understanding of China, the world's largest consumer of our principal products.”

Teck said the CIC investment basically as “a long-term passive financial investor.” While CIC has agreed to hold the shares for at least one year; even subsequent to that period, it will not sell the shares to Teck’s competitor in the mining, metals or minerals industries, or Teck’s material customer.