Chinalco Delays Decision on Capital Injection for Rio Tinto Alumina Project

BEIJING, June 2 -- China's top aluminum producer Chinalco, parent of Chalco, has again deferred a decision over investments in Rio Tinto's Yarwun alumina refinery, Rio Tinto announced Monday.

    Rio Tinto has agreed with Chinalco to push back the deadline from May 31 to June 15.

    Under the earlier agreement over Chinalco's 19.5 billion-yuan investments in Rio Tinto, Chinalco would buy a 30 percent stake in the latter's bauxite mine and 50 percent stake in the Yarwun alumina refining plant.

    However, Chinalco said on March 31 it would put off the investments decision for Rio's alumina project for two months.

    It's been learned that Chinalco still needs some time to assess Rio's alumina project.

    However, the day before the deadline is just when Australia's Foreign Investment Review Board (FIRB) will unveil its final decision on the Rio-Chinalco deal.

    Therefore, whether Chinalco will invest in Rio's alumina project depends on FIRB's decision.

    Earlier in February, Chinalco signed an agreement with the world's leading iron ore supplier Rio Tinto under which Chinalco would invest 7.2-billion U.S. dollars in convertible bonds with a nominal interest of nine percent, and invest 12.3 billion dollars in Rio Tinto iron ore, copper and aluminum assets.

    However, the Australian government announced in mid-March that it would postpone the review term for the Rio-Chinalco deal to 90 days maximum. Besides, media reports said that shareholders of Rio Tinto were still opposed to the deal, worrying that the company's assets may be undervalued.

    (Source: chinamining.org)