Aluminum Corp of China may be willing to proceed with its US$19.5 billion investment in Rio Tinto without taking a stake in the company’s massive Hamersley iron ore mine, Reuters reported, citing people familiar with the deal. Removing the proposed 15% stake in Hamersley would take more than US$5.1 billion off the deal, but sources said Chinalco wouldn’t be particularly worried about it, noting that iron ore is not part of the company’s core business. While Chinese executives are unhappy about changing the original debt and asset package, they have apparently expressed a willingness to get it done without Hamersley. The proposed stake in the mine has become a sensitive issue now that price negotiations have begun over iron ore contracts. China is pushing for steep price cuts.
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