Chinalco exits Rio alumina plant expansion project

China's Chinalco has dropped plans to help Anglo-Australian miner Rio Tinto Ltd/Plc expand an Australian alumina refinery, following the sudden collapse of a wider tie-up of the two companies, a Rio spokeswoman said on Thursday.

Chinalco had until June 15 to confirm its participation in the funding of the Yarwun 2 expansion project, costing about $1.8 billion and lifting annual alumina production to 3.4 million tonnes from 2 million tonnes.

"Those negotiations were terminated along with all the rest of the Chinalco transactions," the spokeswoman said.

Rio Tinto on June 5 rejected a planned $19.5 billion investment by Chinalco that would have given the Chinese state-owned group stakes in a number of Rio assets, including a half-interest in the original Yarwun facility.

Expansion work on the refinery was about 29 percent finished and would not be completed until the second half of 2012 following an earlier decision to slow progress due to weak demand for aluminium, from which alumina is derived, according to the spokeswoman.

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