Rio in $20b talks with Chinalco

Rio Tinto could except a $US19.5 billion cash injection from the Chinese state-owned Chinalco, the Financial Times have indicated.

Rio Tinto could except a $US19.5 billion cash injection from the Chinese state-owned Chinalco, the Financial Times have indicated.

Such an agreement has been widely anticipated after the miner’s Chairman elect, Jim Leng, quit the mining group two days ago because of objections to a tie-up with the Chinese aluminium maker.

Rio, which releases annual results today, announced last week that it had been in talks with Chinalco about selling its convertible notes and stakes in some assets.

In a statement released by the company yesterday, the miner noted the continued media speculation about a possible transaction with Chinalco, stating that the talks may or may not lead to an agreement.

According to the Financial Times, however, Rio has already struck a deal with Chinalco. Under the terms of the agreement, the Chinese aluminium maker would increase its stake in Rio to 18%, from 9%.

Chinalco bought a 9% stake in Rio with US aluminium giant Alcoa a year ago, but it would likely need fresh permission from Australian authorities, which have said Chinalco can increase the stake to 14.99%.

Rio Tinto’s media relations officer Amanda Buckley declined MINING DAILY’s request for comment.

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