Aluminum Corp of China (Chinalco) is prepared to reduce its proposed stake in Anglo-Australian miner Rio Tinto in order to win over the Australian government and the company’s hostile shareholders, the Financial Times reported. According to people familiar with the situation, Chinalco may limit itself to a 15% stake in Rio as opposed to the 18% it was due to receive through the purchase of US$7.2 billion of convertible bonds in the company. Chinalco currently owns 9% of Rio. The concession might make it harder for Canberra to block the deal while freeing up 3% of Rio equity may go some way to appeasing the shareholders. However, the Chinese firm is said to be unwilling to compromise on the US$12.3 billion purchase of large minority stakes in certain Rio assets. It is also sticking with its demand for two seats on the Rio board, but may be flexible in other areas such as iron ore “off-take” arrangements.