Sovereign wealth funds from countries like China are shaping up as powerful rivals in the mining sector, Anglo American Chief Executive Cynthia Carroll said on Wednesday.

The sovereign wealth funds of countries like China, like India, like Russia, the Gulf states, Brazil and Singapore are changing the rules of the game, Carroll said in a speech at London's Royal Institute of International Affairs.

And today the traditional players in natural resources not only have to weigh up each other, but have to be constantly looking over their shoulders at these powerful new or potential entrants into the business.

In February, Anglo expanded its relationship with China, sealing a strategic alliance with the China Development Bank to develop mining projects.

The state-owned bank funded a purchase in November 2006 of 1.1 percent of Anglo by China Vision Resources Ltd, the investment vehicle of Chinese billionaire Larry Yung.

Carroll said the Anglo partnership may help China burnish its less than positive reputation in the mining sector.

Partnerships such as this one may assist in the process of China's moving away from the kind of labour and environmental practices that have caused them reputational damage, she said.

Western criticism of China and its environmental and safety record, however, should be seen in the context of the West's own imperfect history in these areas.

Anglo, the world's fourth largest mining group by market capitalisation, had so far not agreed to develop any specific projects with the Chinese after sealing the alliance, but a possibility was something in the Democratic Republic of Congo.

From our standpoint, the desire would be we develop the mines. We've got the expertise...and they develop the infrastructure. We could leverage our position out of South Africa as well as the relationship between the South African government and the government of Congo.

Anglo has no mines in Congo, but it is currently exploring for diamonds and copper in the country, which has a tenth of the world's copper reserves.

Heavy demand by China for metals to build infrastructure and develop its economy has fuelled a boom in commodity prices over the past several years.

China's state-owned aluminium group Chinalco in February teamed up with U.S. Alcoa to buy a 9 percent stake in mining group Rio Tinto.

The $14 billion purchase was funded by the China Development Bank, a source familiar with the situation said at the time.

Newspapers have said that China also wants to buy a stake in BHP Billiton, which has launched a $170 billion takeover bid for Rio. (Editing by Leslie Gevirtz)

(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.