Who Will Feed the Chinese Monster?

At least for a while, the headline above might have said, "Hu Will Feed the Chinese Monster?"

Last week, amid growing concern about his nation's ability to acquire sufficient natural resources to meet the demands of a rapid industrialization, Chinese President Hu Jintao spent several days in resource-rich Australia. The primary attraction: facilities operated by such big mining companies as Melbourne-based BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RTP). His stops included a smelting plant and a mineral-processing laboratory.

Given Australia's array of resources, and China's voracious appetite for all manner of metals, minerals, and energy, trade between the two countries zoomed upward by 35% in the first five months of this year. Nevertheless, China reportedly remains concerned about Australia's close ties with the U.S.

The companies that Hu and his 100-person retinue visited are among those most likely to benefit meaningfully from Chinese industrialization. Billiton, for instance, has achieved a $193 billion market valuation, and it should derive big benefits from China in the years ahead. It operates from locations almost worldwide, and most of its products, including aluminum, base metals, carbon steel materials, diamonds, and petroleum, are needed throughout the developing world.

Rio Tinto is London-based, although it produces borax, titanium dioxide, salt, talc, and iron ore (all of which find their way into applications in China) on five continents. Currently sporting a $98 billion market cap, it's in the process of spending $38.1 billion for Canadian aluminum producer Alcan (NYSE: AL).

Beyond that, the group has been a hotbed of takeovers and rumors of same. In March, copper producer Freeport McMoRan (NYSE: FCX) bought Phelps Dodge, its larger U.S. copper rival. So Freeport is now three times larger than it was earlier this year, and it's considerably more likely to benefit from China's strong demand for copper. That demand has held up, and with it, the metal's price has been firm, despite U.S. housing and automobile woes.

Both before and after its agreement to buy Alcan, Rio Tinto has been named in the scuttlebutt as a Billiton target. In fact, one day last week, the rumor du jour had Billiton teaming up with Rio De Janeiro-based mining giant Companhia Vale do Rio Doce (NYSE: RIO) to make a run at Rio Tinto.

So with nearly runaway demand in China for everything from aluminum to zinc, I'd suggest that my Foolish friends keep a close eye on all the companies mentioned above. And with the deal activity in the sector being what it is, it'd probably be a good idea to use a scorecard.

From our mine of related Foolishness:

• Her Name Is Rio and She Dances With Alcan
• Market Testing Freeport's Mettle
• Dividends for Your Dreams