China, Rio eye mine deal

jialiren

China, Rio eye mine dealJamie Freed
February 2, 2009
http://business.theage.com.au/bu ... -20090201-7utc.html


RIO Tinto is preparing to strengthen its links to China through a deal worth more than $US15 billion ($A23.5 billion) that would see its largest shareholder, Chinalco, purchase minority stakes in several of its mines.

The miner has been examining ways to lower its $US40 billion debt burden since BHP Billiton dropped its takeover offer in November, including spending cuts, asset sales, a rights issue and a strategic placement.

The Age believes Rio is in advanced negotiations to sell a portion of some of its mining operations to Chinalco, but it will only proceed with the deal if it can achieve a high enough price for the assets.

Reports in London this weekend of a $US9 billion to $US15 billion injection are understood to have understated the size of the potential investment.

An injection of more than $US15 billion would help alleviate concerns about the state of Rio's balance sheet — which have caused the company's market value to fall to $US34 billion, or less than the value of its debt. Rio has to repay $US8.9 billion of debt by October and $US10 billion the following October.

Based on its existing operations, which do not include iron ore or coal production, Chinalco may be most interested in stakes in Rio's aluminium and copper assets.

Chinalco already owns a bauxite project in Queensland and a copper project in Peru, so it could be particularly interested in Rio's alumina assets in Australia and its copper mines and projects in South America.

To date, Rio has sold non-core mines and exploration projects like the Kintyre uranium deposit in Western Australia for prices above market expectations.

On Friday, it sold Brazil's Vale a Brazilian iron ore mine for $US750 million and Argentine and Canadian potash projects for $US850 million.

"The sale of these assets highlights good prices for assets can still be achieved in the current market," said Citi analyst Clarke Wilkins.

Chinalco, along with US aluminium producer Alcoa, last February bought a 12 per cent stake in Rio's London-listed arm for $US14 billion, giving it an overall 9 per cent stake in the dual-listed company.

Chinalco will require the approval of Federal Treasurer Wayne Swan if it wishes to raise its stake in the London-listed arm beyond 14.9 per cent or if it wants to buy shares in the Australian-listed arm.

The Chinese miner has given an undertaking that it will not seek a board seat as long as its stake remains below 15 per cent.

"Any future proposal to increase its level of ownership above 14.99 per cent would require reassessment at that time against Australia's national interests under the Foreign Acquisition and Takeovers Act," Mr Swan said in August.

"While Australia welcomes foreign investment in our economy, we will carefully examine national interest issues where these arise in relation to foreign sovereign ownership."

The proposal to take direct minority stakes in Rio's mines could be cause for less concern than the ownership of a larger equity stake in the company.

Several iron ore and coal mines owned by Rio and BHP are subject to joint ventures with Japanese companies.

London's Sunday Telegraph reported Rio would issue a convertible bond to Chinalco or another Chinese entity as part of the deal. It added Chinalco would increase its stake in the London-listed arm to 18 per cent and purchase up to 14 per cent of the Australian-listed shares.


http://www.riotinto.com

jialiren

力拓与中铝谈判资产出售
英国《金融时报》丽贝卡•布里姆(Rebecca Bream)伦敦、森迪普•塔克(Sundeep Tucker)香港报道 2009-02-02


英澳矿业集团力拓(Rio Tinto)正与中国国有铝生产商中国铝业(Chinalco)就可能的资产出售和股权购买展开谈判，此举可能会帮助力拓避免增发股票。

力拓已承诺，到今年底，将通过资产出售、成本削减和推迟增长项目，将其370亿美元债务负担削减100亿美元。

力拓希望避免增发，但该集团上周被迫承认，没有排除这种可能性。过去6个月，力拓的现金流受到大宗商品价格下跌的挤压，同时，该集团未能找到合适买家，收购其自2007年就试图出售的一些非核心资产。

中铝持有力拓12%伦敦上市股票以及力拓集团9%的股权。中铝去年表示，正考虑增持这部分股权。最近几周，双方的谈判已增多。

力拓最早可能会于今日发表一份声明，证实与中铝的谈判。

据悉，力拓愿意向中铝出售其一系列资产股权，其中可能包括西澳大利亚的核心铁矿石业务以及力拓铝部门的矿山和冶炼厂。力拓还提议向中铝出售可转换为新股的可转换债券，使中铝得以增持其在力拓集团的股权。

中铝已获得澳大利亚政府的许可，可以将其在力拓伦敦或澳大利亚上市股票或在力拓集团的股权比例，增持至不高于14.9%。如果拟议的可转换债券让中铝突破这一比例，那么这将需要获得新的批准，这可能会在政治上引发争议。一位知情人士表示，交易尚未完成，谈判可能不会达成任何协议。他补充称：“现在很难判断交易是否会达成。太多不确定性因素让我们无法假定，可以达成一笔让各方都满意的交易。”

力拓和中铝均拒绝置评。

力拓首席执行官汤姆•艾尔巴尼斯(Tom Albanese)希望在2月12日该集团公布全年业绩时，宣布与中铝达成协议。力拓将被迫增发的市场预期，令该集团股价受到打击。