Australian Resources Minister Martin Ferguson Monday played down any suggestion that the collapse of a planned US$19.5 billion alliance between Rio Tinto Ltd. (RTP) and Aluminum Corp. of China, or Chinalco, will make it easier for the government to approve smaller deals involving Chinese investment.

Asked if Rio's decision to instead pursue a rights issue and joint venture with BHP Billiton Ltd. (BHP.AU) removed the most significant - and therefore controversial - foreign investment decision before Treasurer Wayne Swan, potentially clearing the way for smaller deals, Ferguson said Australia's foreign investment laws are consistent.

"Each application, no matter how big or small, will be considered on its merits," Ferguson told Dow Jones Newswires on the sidelines of a Canberra conference.

That includes applying the key foreign investment guidelines, including a national interest test, he added.

Analysts say the decision by Rio to end its Chinalco alliance clears the air for the Australian government to give the go-ahead to other less high-profile Chinese deals.

The Chinalco-Rio deal would have been China's biggest-ever overseas investment, and raised concerns among some Australian opposition lawmakers about the potential for Chinalco - also a major buyer of Australian commodities - to influence prices.

 
   -By Rachel Pannett, Dow Jones Newswires; 61-2-6208-0901; rachel.pannett@dowjones.com