For the sake of my inbox, let's set aside the possibility that Alcoa (NYSE:AA) sold its stake in Aluminum Corp. of China Ltd (NYSE:ACH) because the latter was exuberantly priced. There are plenty of other reasons that this looks likes a sensible move for America's biggest aluminum company.

Alcoa bought 8% of Chalco, as the Chinese firm is known, during the company's Hong Kong IPO in 2001. Financially, the investment worked out terrifically well -- the shares are up 15-fold. Strategically, not so much.

You have to imagine that Alcoa had big dreams of entering the Chinese market with its investment, but it has had no such luck. The Chinese state closely guards its natural resources, and there's no way it's letting a foreigner lay hands on those hard assets. In other words, it's "Back away from our bauxite, boys."

With those visions of happily mining, refining, and smelting now melting, Alcoa has cashed in its chips. Cash is king these days, and with the recent downturn in aluminum prices, the nearly $2 billion in cash netted from this sale positions the company nicely to pick up more strategic assets elsewhere. Ideally, that would be someplace a little less flush with greenbacks. You tend to lose a fair amount of bargaining power when your host country has $1.3 trillion in foreign exchange reserves.

Failing intriguing investment opportunities, not to mention a potential tie-up with BHP Billiton (NYSE:BHP) or Alumina (NYSE:AWC), Alcoa can return excess capital to shareholders. The company maintains very manageable debt levels, so I believe a buyback would be most welcome.

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Fool contributor Toby Shute doesn't meddle, and he doesn't have a position in any company mentioned. The Motley Fool has a most welcome disclosure policy.