One of Rio Tinto’s
worldwide spread of
mining projects
 
London, England — MININGREVIEW.COM — 02 February 2009 – Rio Tinto – the leading British-based international mining group engaged in finding, mining, and processing mineral resources – is negotiating to raise up to US$ 9billion (R90 billion) from Chinalco – the state-owned Chinese aluminium company which already holds an 11% stake in the company.

Fin24 quotes The Sunday Times newspaper as reporting that the capital injection was intended to address growing concerns about the company’s debt, adding that the Chinese company was planning to buy minority stakes in Rio’s mining assets.

The report added that Chinalco was also considering increasing its stake in Rio to at least 15%, which could be done through a placing to raise about US$1 billion (R10 billion).

On Friday Rio Tinto agreed to sell assets in South America to rival Vale of Brazil for US$1.6billion (R16 billion), sending its shares climbing as investors saw the prospect of a rights issue receding.

However, if Rio failed to agree terms with Chinalco, it would go direct to investors to raise US$9billion (R90 billion), The Sunday Times added.

Rio – which has a US$39billion (R390 billion) debt burden, saw its rival Xstrata last week announce plans to raise about US$5.9billion (R59 billion) by issuing new shares.

Rio said earlier in the week that it did not rule out selling shares, backpedalling on chief executive Tom Albanese’s previous assertion that there was no need for a rights issue to meet his debt-cutting target.

Rio Tinto declined to comment on the report.