State Grid, China's biggest power utility, has agreed to spend at least US$900m (€660m, £599m) to develop a large copper deposit in Chile in partnership with Vancouver-based Quadra Mining.

The deal, announced on Monday, is the latest in a string of moves by Chinese companies to gain greater control over raw materials required for their businesses.

PetroChina teamed up with Royal Dutch Shell on Monday for a US$3.4bn bid for Arrow Energy, an Australian producer of coal-bed methane gas, which can be converted into liquefied natural gas for export to China.

Among earlier deals, Chinalco, a Chinese metals producer, paid US$860m in 2007 to acquire the Toromocho copper project in Peru.

State Grid is one of the world's biggest buyers of copper, mainly for use in power transmission lines.

Under the agreement with Quadra, the Chinese group will contribute the first US$900m towards a new joint venture with Quadra to develop the Sierra Gorda project in northern Chile. Subsequent construction costs will be split equally between the two partners. The total cost of the project is estimated at over US$2bn.

State Grid has agreed to arrange financing for the project, with a target of a 60/40 debt-equity ratio. Quadra will oversee operations.

As part of the deal, State Grid will pay C$152m (US$148m) for a 9.9 per cent stake in Quadra.

Paul Blythe, the Canadian company's chief executive, said that “we always recognised that the project was too big to develop by ourselves and that we would need to bring in an outside partner”.

The link with State Grid “will provide us with an invaluable window on the Chinese market”, Mr Blythe added.

The joint venture will also include Quadra's existing Franke mine in Chile, and may be expanded later to other projects.