Chinalco to Increase US$19.5 BLN of Investment in Rio Tinto       

On February 12th, Aluminum Corporation of China (Chinalco) signed an agreement to raise the stake in Rio Tinto Group of Australia.
    Chinalco will invest aggregate cash proceeds of US$19.5 billion in Rio Tinto Group, of which totaling US$12.3 billion in certain aluminum, copper and iron ore joint ventures, and a consideration of US$7.2 billion for purchasing subordinated convertible bonds in Rio Tinto Group's two subsidiaries - Rio Tinto plc and Rio Tinto Limited. If converted, the subordinated convertible bonds would bring an increment of Chinalco's current stake to 19.0% in Rio Tinto plc and 14.9% in Rio Tinto Limited, equivalent to an 18.0% interest in Rio Tinto Group, Chinalco says. The Chinese aluminum giant holds 9.3% stake in Rio Tinto Group now.
    The two groups will combine Chinalco's capabilities to deliver infrastructure projects with Rio Tinto's leadership in operational excellence and sustainable development, therefore bringing complementary actions.
   According to Xiao Yaqing, President of Chinalco, the acquisition of Rio Tinto's 12% stake in February 2008 laid a solid foundation for both sides' broader strategic partnership. The strategic partnership with Rio Tinto will help Chinalco be a leading global diversified miner to better serve its customers in China and globally.
   Upon creating a pioneering strategic partnership Chinalco, Rio Tinto will enter into a landmark joint venture for exploration in China, in partnership with Chinalco. And the company will benefit from Chinalco's strong position in China, which will be the main driver of growth over the longer term.
   The transaction is subject to approval by the shareholders of Rio Tinto, governments and other regulators.
   Chinalco focuses on minerals and expanding vertically along the supply chain of exploring, mining and processing of minerals. It has prepared cash for acquisition since November 2008. (CCR2008 No.35)
   Rio Tinto Group is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange. Rio Tinto's business is finding, mining, and processing mineral resources.
   The deal is expected to close at the end of July this year.