Chinalco Takes up Rio Tinto Rights Offer

飞雪寒冰

Chinalco, China's top aluminum and alumina producer, said it has taken up its full allocation of Australian miner Rio Tinto Plc's US$15.2 billion rights issue and will remain the company's biggest single shareholder.

"This was an economically rational decision as it prevented a dilution of our ownership of Rio" Chinalco said in an emailed statement on July 2.

The state-owned miner added it believes in the long-term prospects of the industry and will continue to explore opportunities to advance its strategic objectives.

Earlier this month, debt-ridden Rio Tinto withdrew from a proposed US$19.5 billion tie-up with Chinalco in favor of a rights issue priced at A$28.29 per share in Australia and 1,400 pence in London, with 21 new shares offered for every 40 shares held.

Based on the current share price, Chinalco needs to invest more than US$1.4 billion in order to maintain its 12 percent stake in the London-listed Rio Tinto Plc stock, according to Caijing calculations.

Chinalco holds a 9.3 percent stake in dual-listed Rio Tinto and is the Anglo-Australian miner's single largest shareholder.

飞雪寒冰

The company will continue to monitor developments at Rio Tinto in its role as largest single shareholder, it added.

The Melbourne-based miner recently agreed to establish a joint venture with BHP Billiton to develop both companies' iron ore assets in western Australia. Chinese authorities have voiced opposition to the tie-up out of concern it may place too much control over iron ore supply in the hands of the two miners.

China imported 53.46 million tons of iron ore in May, up 37.4 year-on-year, according to the latest statistics released by the General Administration of Customs on June 11.

New Rio Tinto plc shares will commence full trading on the London Stock Exchange on July 2, Rio said in a statement on its website on the same day.