Rio Tinto Says No Talks to Revise Chinalco Deal

Global miner Rio Tinto has not talked to Chinese state-owned metals firm Chinalco about revising a planned $19.5bn tie-up, and still believes the deal makes sense.
Investors have speculated Rio might have to amend the deal after its shares last week climbed above the $45 conversion price on the first of two tranches of convertible notes that would be issued to Chinalco under the deal agreed in February.
"There is no conversation," Rio's head of strategy Doug Ritchie said on Thursday.
Under the deal, Chinalco will buy $12.2bn worth of iron ore, copper and aluminium asset stakes and $7.3bn worth of convertible notes that would double its equity stake in Rio to 18% - helping Rio pay off half its debt.
Ritchie was asked whether the logic of the deal remained, in light of the recent improvement in debt, equity and commodity markets.
"I see no reason why not. It's a volatile market out there and we've got another couple of months before our shareholders will need to vote on it," he told reporters after speaking at a business lunch.
"Many things can change, so we'll just wait and see how it goes," he added.
Some major Rio shareholders have complained the deal favours one shareholder, Chinalco, and want to be able to take part in the capital raising, adding to speculation the deal may be revised.
Australia's Foreign Investment Review Board is due to hand its recommendation on whether the deal should be allowed to proceed to Treasurer Wayne Swan by mid-June. Swan has the final say, and Rio plans to put the deal to a shareholder vote if Swan approves it.
Ritchie dismissed speculation that former suitor BHP Billiton was talking to Rio about a tie-up of their Western Australian iron ore operations, as the Australian Financial Review business daily reported on Thursday.
"I read the story in today's Financial Review - very nice story. Nothing to it."
Pressed on whether there had been any discussions with BHP, Ritchie said: "As I suggested, not in recent times."
He added that BHP's takeover bid, aborted last November, had focused on trying to link up the two companies' Pilbara iron ore operations in Western Australia. Ritchie said just because equity and debt markets were showing signs of improving and China's stimulus spending was starting to bite, that did not mean Rio's prospects had suddenly improved, noting Japan, another big customer, had "fallen off a cliff".