As part of the deal, the Hong Kong-listed company will appoint its vice-chairman and chief executive Chen Zeng to the Alumina board after buying more than 366 million Alumina shares at $1.23 each.

The fully approved share placement is scheduled to be completed on Monday and will be used to repay Alumina bank debt.

Alumina said its net debt position would fall from $US681 million to $216 million as a result of the placement.

The company says the placement establishes CITIC as a strategically aligned and financially strong long-term investor.

“CITIC’s investment demonstrates their confidence in the alumina industry and their understanding of Alumina Limited’s unique position in the global market,” Alumina chief executive John Bevan said.

Zeng said investing further in Australian aluminium was a natural progression for his company’s strategy.

“The placement provides CITIC with the opportunity to invest in one of Australia’s leading companies with a world-class, global portfolio of upstream mining and refining operation in the aluminium sector,” he said.

Alumina shares have surged since the announcement, trading 12% up today at $1.34.