Rio Tinto Signs A Pact With Chinalco (RTP, ACH, BHP)

Rio Tinto Ltd. (NYSE: RTP) has inked a deal with Aluminum Corp. of China (NYSE: ACH) for developing the Simandou iron ore project. Rio Tinto owns a 95% stake in the Simandou project. Chinalco will pay $1.35 billion to acquire a 47% stake in the joint venture. Tom Albanese, Chief executive Officer of Rio Tinto Ltd., said, “We have long believed that Rio Tinto and Chinalco could work together on major projects for mutual benefit."

Rio Tinto and Chinalco have had a strained relationship. In June, 2009, Rio Tinto broke up its $19.5 billion deal with Chinalco, in favor of a joint venture with BHP Billiton (NYSE: BHP). Also, China has detained four Rio Tinto employees on espionage charges.