Miner Rio Tinto Scraps Chinalco Deal

KRISTEN GELINEAU

SYDNEY (AP) — Anglo-Australian miner Rio Tinto PLC on Friday scrapped its $19.5 billion deal with China's Chinalco, choosing instead to raise $15.2 billion in a share sale and setting up a joint production venture with rival BHP Billiton Ltd.

Rio Tinto Chairman Jan du Plessis said in a letter to shareholders the planned deal with Chinalco was now dead and his company would pay it a $195 million break fee, thus ending what would have been China's biggest overseas investment to date.

The proposed deal with Chinalco had sparked opposition in Australia, amid concerns that a foreign state-backed enterprise would own a strategic stake in the country's biggest natural resource assets. ...