Rio stake not in doubt: Chinalco

CHINALCO has scotched speculation the ownership of its stake in Rio Tinto, held by failed investment bank Lehman Brothers, is in doubt.

State-backed Aluminium Corp of China (Chinalco) said overnight that the Rio Tinto shares are held in a separate designated account under a custody arrangement with Lehman Brothers International Europe (LBIE).

¡°There is no basis on which Chinalco¡¯s ownership of the shares could be validly challenged or on which its shares could form part of the general assets of LBIE,¡± Chinalco said in a statement.

Chinalco and US aluminium producer Alcoa Inc teamed up in February to secure a 12 per cent stake in Rio Tinto¡¯s UK shares - or nine per cent of the dual-listed group - for $US14 billion ($20.2 billion).

Reports suggested that the interest in Rio Tinto - held in a custodial account in Hong Kong - had been frozen by Lehman Brothers¡¯ liquidators and that Chinese officials were pressuring the Hong Kong government to hand over the stake.

¡°Chinalco is discussing with the administrators of LBIE in London the arrangements for the orderly transfer of the shares out of LBIE,¡± the company said.

The share raid by the Chinalco-led consortium had been interpreted as an attempt to block BHP Billiton¡¯s proposed $US90 billion ($129.89 billion) all-scrip takeover of Rio Tinto.

The consortium, however, has long touted the investment in Rio Tinto as strategic.

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