Chinalco denies co-op talk with Rio Tinto, but is willing to

on August 24 2009 8:13 PM

An executive from Aluminum Corp. of China Ltd. (Chinalco) denied recent media reports that the company is in talks with Australian miner Rio Tinto on a possible bauxite deal, local media Caijing reported on Monday.

The Australian Financial Review quoted Rio's Chief Financial Officer Guy Elliott as saying that the miner is in the early stages of talks with Chinalco over a possible bauxite and alumina deal.

Rio chief Tom Albanese said on August 20 Rio still sees opportunities to work with Chinalco and has had some early discussions with them.

I personally am interested in seeing that happen, Albanese said, without mentioning the details of the possible co-op.

The Chinalco executive, who is in charge of Chinalco operations in Australia, said he was not informed about the talks, but said Chinalco would not reject a good opportunity from any company.

We've indicated that we're willing to talk, but I know of no other details to share for now, Chinalco's vice president Lu Youqing told Dow Jones Newswires on Monday.

Australian mining giant Rio Tinto walked away from a proposed $19.5 billion deal with Chinalco in June, and instead obtained financing by means of share allocation and a joint venture with BHP Billiton . Chinalco's CEO Xiong Weiping said that he was extremely disappointed at this.

The move was followed by the detention of four of Rio's China-based staff, stymieing price negotiations. The four, detained in Shanghai on July 5 , face charges of bribery and stealing commercial secrets from China's steel industry, which were downgraded from previous suspicion of stealing state secrets.

Chinalco is still searching for opportunities to invest in nonferrous metal mining resources in Western Australia, Caijing reported on Thursday, citing Chinalco's CEO Xiong Weiping who also raised the possibility of cooperation with Rio Tinto.

Xiong, who attended the Sino-Australian Cooperation - Investment in Western Australian Mining Resources and Basic Facilities symposium on July 23, also indicated that Chinalco is willing to explore the possibility of further cooperation with Rio Tinto.

Chinalco is still Rio Tinto's largest shareholder, with a 9.3% stake, and the two companies hold adjacent bauxite deposits in the Australian state of Queensland. They have held talks on possible cooperation there in recent years.

This March Chinalco investigated A$3 billion ($2.58 billion) into the Aurukun bauxite mining project.

Bauxite is an ore used to manufacture aluminum. Alumina is an oxide of aluminum, largely used to bolster the light metal's resistance to weathering.