China promises $7.8bn for Rio Tinto expansion

CHINA is shoring up support for its investment in Rio Tinto by promising to invest up to $US5 billion in its expansion plans.

The Sunday Times in the UK reported yesterday that China¡¯s state-owned Exim Bank has written to Rio saying it is "delighted" at the planned investment by Chinalco and was willing to invest $US5 billion ($7.8 billion) into the company.

The report said the deal with Chinalco had aroused anger among some Rio Tinto shareholders because it has ignored their traditional pre-emption rights.

Separately, Bank of China wants to take part in the financing of Chinalco¡¯s investment in Rio, the official Xinhua News Agency reported late Friday, citing bank Chairman Xiao Gang.

Rio Tinto last month struck the $US19.5 billion deal with Chinalco that will give the Chinese group minority stakes in a suite of assets and convertible bonds that could ultimately deliver an 18 per cent stake in the miner.

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