Anglo-Australian miner Rio Tinto confirmed it is in talks with Chinese aluminum producer Chinalco, formerly known as Aluminum Corp. of China, over a large investment that would alleviate Rio’s debt burden, the Wall Street Journal reported. A possible cash infusion from the state-owned Chinese firm is one of the options Rio Tinto is considering, according to a statement released on Sunday. Another option is a large placement of shares with its existing investors, known as a rights issue. Rio will likely make a decision on which option to pursue by February 12, when it reports its 2008 results. Rio is facing a severe downturn in the metals industry due to falling prices as well as the November collapse of rival BHP Billiton’s US$70 billion bid to purchase Rio. The investment would give China more influence over a key supplier of iron ore. Chinalco teamed up with Alcoa last year to buy 9% of Rio for US$14 billion.
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