Chinalco blames Rio for deal collapse

11th Jun 2009 16:29

Chinalco today laid the blame firmly at the door of Rio Tinto for the collapse of its proposed $19.5bn refinancing plan. The Chinese state-run aluminium producer added that the collapse of the deal last week was "totally out of our control".President Xiong Weiping told reporters in Beijing that Chinalco had already agreed to significant amendments to the terms of the original deal and was confident it could have got approval from both Rio shareholders and regulators in Australia."I won't comment on Rio Tinto's performance during negotiations but we are very disappointed with the decision of the Rio Tinto board to withdraw their recommendation for this transaction," Xiong said.The deal would have seen Chinalco increase its stake in the mining giant to 18% from 9.25%. Chinalco says it was willing to negotiate over parts of the deal but apparently was prepared to agree to nominating an Australian as one of its two representatives on Rio's board.Xiong said Chinalco had agreed to reduce its proposed 18% equity stake and halve its proposed holding in Australia's Hammersley mine from 15% to 7.5%. "We believe these are very significant concessions and amendments to the original transactions and they should be sufficient to meet the requirements of both the shareholders and the Australian regulators," Xiong added."In the process of this transaction, Chinalco has also felt the open and welcoming attitude from the Australian government towards foreign investment, including from China," he added.