Rio May Help China Get Foreign Mines, Albanese Says

MELBOURNE, Mar. 23 -- Rio Tinto Group, the world's third- largest mining company, wants to help China secure overseas mines and explore for domestic deposits.

Rio could use the joint venture with Aluminum Corp. of China to develop the Simandou iron-ore deposit in Guinea, announced last week, as a model for other China outbound investments, Chief Executive Officer Tom Albanese said in speech notes for a presentation he gave today to the China Development Forum in Beijing.

London-based Rio is working to repair relations with Chinalco, as the state-owned company is known, which were soured last year when it scrapped a $19.5 billion investment by the Chinese company and four Rio employees were arrested in Shanghai. Chinalco is also Rio's largest shareholder.

"This way of working is what we can bring to the partnership with Chinalco on projects of a similar nature to Simandou, involving Chinese outbound investment," Albanese said. Rio could use its exploration expertise to help "China to find major ore bodies on its home soil."

Companies in China, the biggest metals buyer, spent more than $30 billion buying up mines and oil deposits globally last year. Co-operation between state-owned enterprises on overseas projects could unlock "hidden value," Albanese said.

Rio declined 1.4 percent to A$75.13 at 3:44 p.m. Sydney time on the Australian stock exchange.

A venture with Chinalco "could make sense for Rio Tinto in leveraging China's geopolitical influence in Africa, ability to build and control infrastructure in sensitive regions and the country's appetite for iron ore," Liberum Capital Ltd. analysts wrote in a note last week before Rio's agreement with Chinalco.