State-owned Valin agreed to buy 225 million new Fortescue shares at 2.48 Australian dollars each, Dow Jones Newswires reported, citing a company statement.

Officials at the two companies were not immediately available for comment.

The Chinese company also agreed to acquire 275 million existing Fortescue shares from hedge fund Harbinger Capital Partners, the report said.

Valin said it would fund the deal with its own cash reserves and financing facilities.

The deal is the latest in a series of Chinese investments in Australian mining companies.

Earlier this month, China's Minmetals offered 2.6 billion Australian dollars to take over debt-laden OZ Minerals.

The proposed deal came days after China's state-owned aluminium firm Chinalco said it was putting 19.5 billion US dollars into another troubled Australian mining giant, Rio Tinto, to increase its stake to 19 percent.

Australian politicians have raised concerns about China's state-owned entities buying into Australia's resource sector.

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