Rio Tinto has confirmed it is in negotiations to sell assets to state-owned Chinese aluminium company Chinalco.
Depending on whose report you read, the deal is thought to be worth $12.5 billion (The Australian and abc.net.au) or as much as $23.5 billion (The Age), and would provide Chinalco, already Rio s main shareholder, with a strategic investment in Australian resources.
Some analysts are expecting there will be more of this type of activity to come; as the global economic downturn slashes the value of Australian mines, and mining companies are left floundering, there are more investment opportunities for China.
The additional stake in Rio would be limited under current foreign ownership guidelines, however a report in The Australian suggests the Rudd government may be considering a relaxation of the current limits.
Rio shares were up 6.88% this morning, while BHP fell 2.16%. Fortescue Metals also gained 9.04%.
Stocks for your watchlist:
Rio Tinto: RIO (ASX and LSE)
BHP Billiton: BHP (ASX), BLT (LSE)
Fortescue Metals: FMG (ASX)
Further Information:
- Reuters News Feed through the Market Analyser
