Updated from June 4The debt-ridden Aussie mining giant Rio Tinto ( RTP) made official Thursday night its decision to scuttle a contentious deal with the Chinese aluminum concern, Chinalco. Under an agreement signed in February, the Chinese government-owned Chinalco was to infuse $19.5 billion into Rio Tinto, which was struggling to pay down $19 billion in debt over the next year and a half. An $8.9 billion payment is due in October. But Rio was able to cobble together a more attractive replacement for the scrapped Chinalco alliance, investors seemed to say Friday, when they pushed Rio's Australia-listed shares up by more than 8%. In New York, its American Depositary Receipts were trading at $195.96, up 7%. Rio shares had dropped sharply on Thursday when word emerged that it would likely move away from Chinalco, but details of the new rights offering appeared to appease investors. In Sydney Friday, the company announced that it would issue a whopping $15.2 billion in rights on London and Australian exchanges. It will use the capital to cuts its debt from nearly $40 billion to $23.2 billion. Rio also agreed to sell stakes in some key mining assets to archrival BHP Billiton for $5.8 billion. The companies will form a joint venture that will combine iron-ore production in Western Australia. Chinese authorities, in a statement, said they would be monitoring that BHP-Rio linkup for signs of monopoly behavior. Shareholder opposition to Rio's Chinalco alliance has been fairly fierce, especially because Rio's stock price has risen sharply since the deal was struck in February -- its ADRs are up 75% over that same span. Shareholders were therefore pushing management to either renegotiate the agreement with Chinalco or scrap it. The break-up fee is nearly $200 million.