Rio slips; Chinalco sale talk cited

Shares in Rio Tinto (RIO.L) lose 1.9 percent, the heaviest fallers among a broadly softer mining sector, with traders citing talk that Chinese state-owned Chinalco is poised to sell its stake in the world's second largest iron ore miner.

"Speculation (is) doing the rounds Chinalco (is) selling (its) Rio stake. We think (it is) unlikely," says a London-based trader.

Rio Tinto declined to comment on the speculation, and Chinalco was unavailable for comment.

Chinalco bought 12 percent of Rio's London-listed shares and around 9 percent of the combined group, which is also listed in Australia (RIO.AX), in February 2008.

Overall the FTSE 350 mining index .FTNMX1770 is down 1.1 percent and the sector is the second biggest drag on Britain's blue-chip index .FTSE as investors retreat from the sector after sharp gains in the previous session, with Monday's strength in metal prices reversing.

Fresnillo (FRES.L), Vedanta Resources (VED.L), Kazakhmys (KAZ.L), and Xstrata (XTA.L) are all down around 1.5 percent.

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