Rio Tinto CEO says Australia has large stake in proposed Chinalco alliance - Update

(RTTNews) - At the annual general meeting, Rio Tinto Group (RTP: News ,RIO.L: News ,RIO.AX: News ) chief executive Tom Albanese stated that Australia has a large stake in the outcome of the proposed strategic partnership with Chinalco. Rio Tinto specified that the alliance will be beneficial to Australia and company shareholders, both in the near and the long term. CEO Albanese said the Australia-China relationship is critical for both countries and that there presently exists "an opportunity for Australia to position itself for a mutually rewarding relationships that could define the next few decades." On February 12, the company had announced its intention to form a strategic alliance with existing shareholder Chinalco, as part of Rio Tinto's plans to reduce its hefty debt by US$10 billion by the end of 2009. The company's net debt position at the end of October 2008 was US$38.9 billion, mostly from its acquisition of Canadian aluminum producer Alcan, Inc. in 2007 for about US$38 billion, down from US$42.1 billion at the end of the first-half of the year. Formerly known as Aluminum Corp. of China, state-backed Chinalco, and US-based aluminum producer Alcoa, Inc. (AA) acquired a 12% stake in Rio Tinto's London listed shares in late January 2008 for US$14 billion. Chinalco's cash investment of 19.5 billion dollars for the acquisition of minority economic interests in some assets and for convertible bonds is expected to be accretive to the company's balance sheets.