The move will make QIA the third largest shareholder in Xstrata behind Glencore which holds a 33.6% stake, and asset manager BlackRock which has a 5.43% interest.
QIA built up its Xstrata holdings through a series of stock market transactions which began after Glencore announced its intention to buy Xstrata, reports Reuters.
Glencore plans to buy Xstrata in an all-share transaction that could create a combined group worth more than $79 billion.
The merger needs to be approved by 75% of shareholders excluding Glencore.
Standard Life Investments and Schroders are two of Xstrata’s key shareholders which are seeking better terms from Glencore.