Chinalco still values investment in Rio Tinto highly

Chinalco, the parent of Chalco (ACH.NYSE; 601600.SH; 2600.HK), still thinks highly of the long-term investment into Rio Tinto, after BHP Billiton announced Tuesday night the decision to abandon its 90 billion-dollar (57 billion U.S. dollars) bid for Rio Tinto, stated Lu Youqing, vice manager general and spokesman of Chinalco.
 
In February this year, Chinalco partnered with Alcoa Inc. to acquire a 12-percent stake in Rio Tinto. Chinalco contributed up to 14 billion US dollars and became the largest single shareholder of Rio Tinto.

"The death of the proposed takeover, out of BHP Billiton's own interests, is also beneficial to the entire steel industry in the world," said Lu Youqing.

Lu also noted whether or not to accumulate the shares in Rio Tinto held by Chinalco is still to be discussed.

The current steel and iron ore markets suffer from great downturn and may further deteriorate; thus, BHP has to focus on curbing profit decline and responding actively to changes on the iron ore market, according to analyst Zeng Jiesheng from MySteel.com.

On BHP's withdrawal, Rio Tinto states efforts to continue its original operation strategy, i.e. to develop long-term projects with large scales and low costs.

It also declares the company owns a number of cash-flow-creating projects and has a bright future.

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