Fund managers were left fuming when it became clear that Rio Tinto, the Anglo-Australian mining company, was to propose a capital injection from a Chinese resources company. The deal could substantially dilute their holdings without giving them a chance to inject their own capital. Their anxiety was understandable, but it was for the wrong reason – they should be more concerned about having a major shareholder that is also a customer of the company.

Rio Tinto said yesterday that it would raise $20bn (€25.7bn) through a deal with the Chinalco, a state-backed Chinese resources company. Rio would sell stakes in aluminium, copper and iron ore joint ventures, but investors focused on the decision to issue convertible bonds that, when converted, would increase Chinalco's stake in the company to 18%.