Chinalco-Rio regulatory review period extended

Australia’s Treasury department said Monday that it is extending the regulatory review period for Aluminum Corp of China’s (Chinalco) proposed investment in mining giant Rio Tinto by 90 days, the Wall Street Journal reported. The extension was widely expected as officials deliberate on the US$19.5 billion deal which would provide Rio with much needed capital but also allow a state-backed group an even larger foothold in the Australian mining industry. Some institutional shareholders oppose the investment as it would see their holdings diluted by the issue of new stock to Chinalco while they have no chance to participate. Australian Foundation Investment, which held US$73.6 million in Rio Tinto stock as of February 28, threw its weight behind the opposition on Monday. It said it was unhappy Chinalco – a company it sees as a customer and competitor of Rio – was being given significant influence without a premium being paid.