Chinalco willing to work on Rio deal

The deal that sees China's Chinalco as Rio Tinto's white knight, could take a different form. The Sydney Morning Herald reports that the Chinese aluminium giant is willing to restructure its US$19.5 billion investment in Rio to ease shareholder and Australian government concerns. According to the Herald, Chinalco is prepared to drop complex marketing provisions, eliminate a contractual claim to 30 per cent of Rio's iron ore production and is willing to strip out some 'governance' requirements, including contractual rights to appoint employees at new joint ventures. Chinalco is also open to discussing proposals for Rio to issue new convertible bonds to existing shareholders as long as its interest is not diluted below 15 per cent. This comes a day after Dow Jones reported that Rio told Chinalco the deal would need a big rework if shareholders continued to frown on the investment.