Lehman Collapse Said to Hurt Chinalco's Rio Tinto Holdings

Aluminum Corporation of China (Chinalco) is said to be in talks with the liquidators of Lehman Brothers to get back its stakes in London-listed Rio Tinto plc (LON: RIO) now being in Lehman custodian account but frozen due to Lehman's bankruptcy, according to sources.

Chinalco and US-based Alcoa Inc. jointly bought 12% of Rio Tinto's London-listed shares for USD 14.05 billion early this year, getting a 9% stake in dual-listed Australian mining giant Rio Tinto. And if the aforesaid situation further worsens, Chinalco would suffer a huge loss in its holdings in Rio Tinto, according to the source.

Besides, value of Chinalco's shares in Rio Tinto has shrunk nearly 44% to USD 8 billion by far.

Insiders from board secretariat of China Aluminum Corporation of China Ltd. (SEHK: 2600; Chalco), Chinalco's listed unit, said yesterday that market value shrinking was normal under current market condition and emphasized that Chinalco, as a strategic investor, would not sell or buy Rio Tinto shares due to price fluctuations.

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