Rio Tinto / China Deal Scrapped

In a dramatic move, Rio Tinto has terminated a proposed deal between the Australian-British mineral mining giant and Chinalco. Originally, Chinalco, a Chinese state-owned company, was to pay $19.5 billion, for an 18.5 percent stake in Rio Tinto.

The deal was widely criticized in Australia by the Liberal Party. Opposition was raised linking the deal with selling vital Australian assets to a foreign government-entity.

As a result, Rio Tinto will pay Chinalco a $195 million compensation fee. To raise revenue, the company will form a joint venture with long standing rival, BHP Billiton worth $5.8 billion, and raise a further $15.2 billion from a stock offering.

As previously reported by IDEX Online, Jim Leng, served as Chairmen-Elect for less than a month and resigned following his resistance to the deal.