Rio Tinto Says No Talks With Chinalco on Deal Changes

May 7 (Bloomberg) -- Rio Tinto Group, the world’s third- largest mining company, hasn’t held talks with Aluminum Corp. of China to change the terms of a proposed $19.5 billion investment amid investor calls for renegotiations. “There’s no conversations” to alter the terms of the convertible note portion of the proposed investment, Doug Ritchie, global head of strategy at London-based Rio, told reporters in Melbourne today. An Australian regulator has asked for more information on the deal, he said. Rio, which has agreed to sell $7.2 billion of convertible debt and stakes in projects worth $12.3 billion to state-owned Chinalco, may have to alter the terms after its share price rose, said ING Groep NV. Legal & General Group Plc, Rio’s third- largest investor, called in February for an alternative proposal. “These are very volatile markets, things are changing quite rapidly,” Ritchie said. “We have a while to go and we’ll see how things go and our shareholders can make up their minds.” Rio gained 2.8 percent to A$71.04 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The stock has gained 37 percent since announcing the deal on Feb. 12. Beijing-based Chinalco on May 4 said it was pressing ahead with the planned investment after the Financial Times reported it may be offered less convertible debt. Vice President Lu Youqing said Rio hadn’t submitted a request to change the terms. ‘Continual Engagement’ Rio has “continual engagement” with Australia’s Foreign Investment Review Board, which will make a recommendation to Federal Treasurer Wayne Swan on the deal, Ritchie said, adding he had no indication on the timing of the announcement of the regulator’s decision. Rio Chief Executive Officer Tom Albanese was forced to seek a deal to help reduce as much as $38.9 billion of debt, incurred mainly through the purchase of Alcan Inc. The probability of Chinalco completing the investment in Rio is below 50 percent, Liberum Capital Ltd. said last month, citing a rebound in financial and commodity markets. Rio may consider an iron ore joint venture with BHP Billiton Ltd., the world’s biggest mining company, in Western Australia, Deutsche Bank AG said in March. Rio last year rejected a hostile BHP takeover offer. There hasn’t been any talks for a joint venture between BHP and Rio at their Pilbara iron ore mines “in recent times,” Ritchie said. He wouldn’t comment on an Age newspaper report April 23 that Chairman Jan Du Plessis had met his BHP counterpart Don Argus that month. To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net