Rio¡¯s Albanese Says Chinalco Pact Good for Australia (Update1)

Rio Tinto Group, the mining company that agreed to a $19.5 billion investment from Aluminum Corp. of China, said Australia has a large stake in the outcome of the proposed deal.

¡°There is currently an opportunity for Australia to position itself for a mutually rewarding relationship that could define the next few decades,¡± Chief Executive Officer Tom Albanese said in speech notes prepared for today¡¯s annual shareholder meeting in Sydney.

State-owned Chinalco, as the Beijing-based company is known, plans to buy $7.2 billion of convertible debt and $12.3 billion worth of stakes in projects owned by Rio, the world¡¯s third- largest mining company. The deal faces scrutiny from Australian politicians because the bailout plan would hand partial ownership of some mines and plants to a state-owned Chinese firm. Shareholders are calling for an alternate proposal.

¡°By facilitating a deeper engagement with China, including by allowing substantial inflows of capital, we could forge stronger and more enduring export markets,¡± Albanese said in the speech notes. ¡°The Australia-China relationship is critical for both countries and Rio Tinto supports efforts that will bring the two countries closer together.¡±

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