Rio’s Albanese Says Chinalco Accord Needed to Weather Downturn

March 31 (Bloomberg) -- Rio Tinto Group Chief Executive Officer Tom Albanese said a planned $19.5 billion investment from state-owned Aluminum Corp. of China is needed to weather the global recession. The offer from Chinalco, as the Beijing-based company is known, is better than other offers for Rio, including from BHP Billiton Ltd., because it allows Rio directors to keep control, brings debt levels down and “lowers the cost of insuring our debt,” Albanese said today in an interview on CNBC. Rio is the world’s third-largest mining company “If this was a shorter recession, maybe something that is a smaller solution would be better,” Albanese said. “If things stay flat for the next two years, through the end of 2010, a larger transaction -- a larger quantum of a solution, which is what Chinalco brings to the table, I believe is the best solution.” Chinalco plans to buy $7.2 billion of convertible debt and $12.3 billion worth of stakes in projects owned by Rio. The Chinese company would own 18 percent of London-based Rio if it converts the debt. Rio rose 13 pence to 2,350 pence today in London trading, taking this year’s gain to 58 percent. To contact the reporter responsible for this story: Rob Delaney in Toronto at robdelaney@bloomberg.net.