Buoyant Rio seeks to form joint ventures with Chinalco

Rio Tinto is keen to use its growing relationship with shareholder Chinalco, the Chinese state-owned aluminium producer, to pursue joint ventures around the world and even increase its presence in China.

Chinalco is now the largest shareholder in Rio, which yesterday reported record half-year underlying earnings, having bought a 9 per cent stake in a surprise dusk raid in February.

Wayne Swan, Australia's Federal Treasurer, said last week that he would permit Chinalco, China's biggest aluminium producer, to buy up to 14.99 per cent of Rio's London-listed shares.

This would equate to an 11 per cent stake in the mining company's combined Australian and London-listed stock.

Paul Skinner, Rio chairman, said Chinalco had not yet spelled out its long-term plan for its holding.

Some analysts think Chinalco bought the shares as a way to block BHP Billiton's hostile takeover bid for Rio, launched last November and currently being scrutinised by antitrust regulators around the world.

Others see Chinalco's holding as a way to be first in the queue if BHP succeeds in its bid but is forced to sell assets by the regulators.

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