Rio Tinto 'committed' to Chinalco deal

15th May 2009 08:17

Rio Tinto, the world's third-largest miner, has received clearance from an American investment body that keeps its $19.5bn (£13bn) fundraising with China's Chinalco on track.A thumbs up from the Committee on Foreign Investment in the US (CFIUS) satisfies a regulatory pre-condition to the transaction and follows approvals in both Australia and Germany.State-owned Chinalco agreed in February to pay $12.3bn for stakes in a number of Rio's mining assets. It will also subscribe for a $7.2bn convertible bond that could double its equity stake from 9% to 18%.A month later, the Chinese secured a $19.5bn loan to proceed with the deal and a further $1.5bn standby facility to fund working capital and other costs."The company remains committed to delivering this strategic partnership," said Rio in response to a query from the Australian Stock Exchange concerning movements in its share price. Rio shares have slumped almost a fifth in the past week on fears the miner would scrap the deal and plump for a huge rights issue instead.Its biggest shareholders are thought to prefer a tie-up with rival BHP Billiton.