Investors still unhappy with Rio Tinto's Chinalco deal

One major institutional shareholder told The Daily Telegraph: "That's completely wrong. A number of institutions will still vote against the deal."

Professional investors are unhappy with the proposed $19.5bn (?13.7bn) transaction because it does not respect pre-emption rights. The deal has been criticised for favouring one shareholder over another.

Mr Albanese is in Australia meeting investors based in Sydney and Melbourne, as well as Australian regulator the Foreign Investment Review Board (FIRB). This follows a meeting between the FIRB and new Chinalco president Xiong Weiping on Tuesday. While addressing analysts and media groups in Australia Mr Albanese said that "there was a growing consensus on the value proposition" of the deal.

Mr Albanese's comments were echoed a note released by Australian-based Deutsche Bank analyst Rob Clifford. He said: "With the benefit of three weeks of deal digestion - and despite having another three to four months to play out - some early feedback appears to be encouraging and supportive."

Mr Clifford concluded that Rio Tinto shares looked undervalued "on almost all metrics."

Mr Albanese also told journalists that the deal with the state-owned Chinese group did not rule out an iron ore joint venture with BHP Billiton in Western Australia. One of the major arguments BHP used when it was pursuing a takeover of Rio Tinto was that significant cost savings through shared infrastructure in the Pilbara region made the deal attractive.

Rio Tinto will used the cash injection by Chinalco to reduce its $38bn debt pile, most of it associated with the 2007 purchase of Canadian aluminium producer Alcan.

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