Chinalco Raises US$21b For Rio Tinto Deal

CHINESE metals group Chinalco has arranged a US$21-billion loan to finance its planned tie-up with global miner Rio Tinto, China's top aluminum company said yesterday.

Chinalco, as Aluminum Corp of China is known, raised the loan from a consortium of banks led by the China Development Bank. The loan arrangement includes a US$19.5-billion loan for the transaction and a US$1.5-billion standby facility to finance working capital and other expenditure, Chinalco said.

"The commercial terms we have obtained reflect the banks' confidence in the excellent potential of our partnership with Rio Tinto and in the long-term prospect of the mining industry," Chinalco President Xiong Weiping said.

Under the deal, Chinalco would pay US$12.3 billion for stakes in Rio's iron ore, copper and aluminum assets and US$7.2 billion for convertible bonds that would double its equity interest to 18 percent.