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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (34763)	3/27/2009 2:26:45 PM
From: LoneClone	Read Replies (1) \| Respond to of 194042

Rio may sell assets if Chinalco deal fails Reuters Posted: Thu, 26 Mar 2009 miningmx.com [miningmx.com] -- Mining giant Rio Tinto said on Thursday it could sell more assets and reschedule debt should a proposed $19.5 billion tie-up with Chinese state-owned company Chinalco fail to materialise. Rio expects a recovery in metal prices in the second half as China's stimulus package boosts infrastructure spending in the world's most populous nation, Chief Financial Officer Guy Elliott also told a mining conference in Singapore. "First of all, we think it (the Chinalco deal) will go through but we have plans in the eventuality if other various governments or shareholders prevent the deal," Elliott said. Alternatives could include bond issues, more asset sales, a rights issue, a rescheduling of debt or combination of the them, he said. Under a proposed deal, China's top aluminium company will pay $12.3 billion for stakes in Rio's iron ore, copper and aluminium assets and $7.2 billion for convertible bonds that would double its equity stake in Rio to 18 percent. Australia's competition watchdog cleared Rio's tie-up with Chinalco this week, rejecting at least one key argument against a deal, which still needs the treasurer's approval. Elliott said the Chinalco deal could provide the firm with greater access to the China market and possible funding from the Chinese government on projects in the mainland. He said the Rio board decided in favour of a deal with Chinalco over a rights issue because there was a lot of uncertainty about the outlook for the industry at that time. Rio, which has already sold several billion dollars worth of assets, separately said it will shut a pig iron plant in Australia for 12 months, due to a weak outlook. Elliott said that despite contradictory signals from the world economy, he was hopeful metal prices will recover in the second half of the year as China's increased infrastructure investment offset falling demand in the West. "There is a case, you can believe, for a recovery in the second half," he said. "We are not far away from the bottom."