Chinalco to restructure Rio Tinto deal-report
SYDNEY - Chinese state-owned metals firm Chinalco will restructure its $19.5 billion tie-up with miner Rio Tinto Ltd/Plc to allay Australian government concerns, the Sydney Morning Herald newspaper said on Thursday.
Citing sources close to Chinalco, the report from Beijing said the Chinese firm is prepared to replace marketing provisions with a clear undertaking that it will not play any role in setting prices.
Chinalco is also prepared to scrap a contractual claim to 30 percent of Rio's iron ore production but would not concede on its planned stakes in Rio assets or on its right to appoint two directors to the board, the paper said.
The report is the latest in a series speculating on changes to the Rio-Chinalco deal. The speculation has come as Rio Chairman Jan Du Plessis meets shareholders to discuss the deal.
Major UK-based investors in Rio have demanded that it scrap a deal with Chinalco and actively pursue a new capital raising or a sale of assets to rival BHP Billiton Ltd/Plc (BLT.L) (BHP.AX). Some Australian politicians have also opposed the deal.
Rio said on May 15 it remains committed to the tie-up.
The Herald said that Chinalco is open to discussing proposals for Rio to issue new convertible bonds to mollify some shareholders who have complained that the issue benefits Chinalco at their expense, provided its interest is not diluted below 15 percent.
Separately, the Australian Financial Review newspaper said Chinalco subsidiary Chalco (2600.HK) (601600.SS) has told Australia's Queensland state government that a fall in alumina prices has made the building of a new refinery in the state less likely.
The decision could mean further political challenges for the Chinalco-Rio deal, the paper said.
Australia's Foreign Investment Review Board (FIRB) is expected to make its recommendations on the deal to Treasurer Wayne Swan by June 15. Swan has the final decision on whether to allow the deal. (Reporting by Jonathan Standing)
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