Global mining giant Rio Tinto (ASX: RIO) is reportedly negotiating an asset-for-equity swap with China Aluminum Corporation (Chinalco) that could lower the Chinese state-owned company’s stake in Rio to about 11%, according to sources cited by Reuters.
Under the proposed arrangement, Chinalco would exchange part of its Rio Tinto shareholding for stakes in selected Rio assets — a move that could simplify the miner’s ownership structure and potentially allow it to resume share buybacksand pursue new strategic deals.
Neither company has issued a public statement on the talks.
Chinalco first acquired a 15% stake in Rio Tinto Plc — the London-listed half of the dual-listed group — in 2008. The purchase was approved under strict Australian government conditions, including a cap on ownership increases and no board representation.
The relationship between the two companies has at times been contentious. In 2009, regulators and shareholders rejected a proposed $19.5 billion investment from Chinalco aimed at rescuing Rio from a $39 billion debt burden, citing concerns over Chinese influence in key mining assets.
Major Assets on the Table
Sources say the potential deal could involve some of Rio’s flagship projects, including the Simandou iron ore mine in Guinea, where Chinese interests already hold a 75% stake, and the Oyu Tolgoi copper project in Mongolia — one of the world’s largest underground copper mines.
Another possibility is Rio’s titanium operations, which are being reviewed as part of a restructuring plan by CEO Simon Trott, who took over in August. Trott is reorganizing Rio into three core business units: iron ore, copper, and aluminum-lithium.
The talks come amid renewed pressure from activist investors urging Rio to simplify its dual Anglo-Australian listing, arguing that it complicates governance and limits flexibility in jurisdictions where Chinese ownership faces regulatory barriers.
