Anglo-Australian mining group Rio Tinto will receive a US$19.5 billion cash injection from Chinese state-owned mining firm Chinalco, the Financial Times reported. Chinalco will buy US$7.2 billion in convertible bonds, which will convert into Rio shares at a later date. This will bring Chinalco’s stake in Rio to 18% from its current 9%. Chinalco will invest US$12.3 billion in three strategic partnerships with Rio’s copper, aluminum and iron ore divisions, taking minority stakes in nine assets, including the Escondida copper mine in Chile. The Chinese company will also receive one seat on Rio’s board and the right to appoint another at a later date. The deal has angered some of Rio’s leading shareholders in the UK, according to the report, and Rio Tinto’s new chairman-designate has already resigned over the issue. The cash injection is pending regulatory approval in the countries affected by the deal, including Australia and Chile.
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