Rio Tinto announced a strategic partnership with Chinalco one of China’s largest diversified materials companies. The joint ventures and convertible bonds will provide Rio Tinto with US$19.5 billion in cash. The deal consists of investment by Chinalco in certain aluminium, copper and iron ore joint ventures totalling US$12.3 billion. In addition to this Rio Tinto will issue convertible bonds in two tranches with conversion prices of US$45 and US$60 in each of Rio Tinto plc and Rio Tinto Limited for a total consideration of US$7.2 billion. If converted, the subordinated convertible bonds would increase Chinalco’s current shareholding to 19.0% in Rio Tinto plc and 14.9% in Rio Tinto Limited, equivalent to an 18.0% interest in the Rio Tinto Group.
