China has teamed up with US aluminium giant Alcoa to buy a 12% stake in Anglo-Australian miner Rio Tinto for $14.05bn (£7.05bn).
Rio has been resisting BHP plans for a takeover
The state-owned Aluminium Corp of China (Chinalco) said the purchase was the largest Chinese investment overseas.
The move could stall efforts by the world's largest miner, BHP Billiton, also Anglo-Australian, to buy Rio.
Alcoa and Chinalco said they don't currently intend to make an offer for the whole of Rio Tinto.
But they said they reserved the right to do so if Rio received a firm bid from a third party.
The two companies paid a total of $14.05bn for the holding through a Singapore-based entity, with Alcoa contributing up to $1.2bn.
"We have long believed that Rio Tinto has a world-class portfolio of assets and is very well positioned to prosper in the current mining cycle," said Alain Belda, Alcoa's chairman and CEO said in the statement.
Analysts said the two aluminium producers want to block a combined firm that would control a third of the iron ore market and dominate markets for copper, aluminium and coal.
"The Chinese are trying to stop the deal going through. I'm sure that's the reasoning behind this," said Tom Gidley-Kitchen an analyst at Charles Stanley.
Chinese state media said the deal was in Chinalco's and Rio Tinto's interests.
"It is a strategic stake for Chinalco becoming a multinational and multi-metals company," Chinalco said in a statement.
The move comes just before a 6 February deadline for BHP to make a firm offer for Rio or shelve plans for six months.
"On its own, 12% may not be enough to block BHP if it really wants to go after Rio, but it certainly can throw a wrench into its plans," said James Wilson, an analyst at DJ Carmmichael & Co.
Rio has so far spurned BHP's overtures, saying it fundamentally undervalued it and its growth prospects.
London and Melbourne-based Rio Tinto had asked the UK's Takeover Panel to force BHP to formalise its all-share bid, worth around $140bn.
In November BHP proposed a offer that involved one Rio Tinto share to be swapped for three shares in BHP.
Rio said the investment by Alcoa and Chinalco reinforced its view that BHP's offer was too low.
"It may make the probability of BHP providing a cash alternative or cash component more probable. It certainly puts some pressure on BHP," said Mr Gidley-Kitchen.
BHP declined to comment.
Rio shares surged on the news, gaining 10.5%, or 520 pence, to 5476p.