By staff reporters Yan Jiangning and Zhang Yuzhe

(Caijing.com.cn) Aluminum Corp. of China (Chinalco) said it obtained US$21 billion worth of financing from four Chinese banks to fund its proposed investment in Anglo-Australian miner Rio Tinto.

The loan will be provided by a consortium of Chinese banks led by China Development Bank, Chinalco said in a statement on its website on March 27.

The Export-Import Bank of China, Agricultural Bank of China and Bank of China are participating in the facility, Chinalco said, fulfilling a requirement for the Chinese metals group to secure funding for the Rio deal by the end of March.

Chinalco on Feb. 12 agreed to buy stakes in Rio’s iron ore, copper and aluminum assets and convertible bonds for a total US$19.5 billion in a deal that would give it an 18 percent equity interest in the mining company.

The financing gives Chinalco an additional US$1.5 billion to cover costs associated with the deal and to boost working capital.

Chinalco’s purchase requires approval from Rio’s shareholders, who meet in May, and Australia’s Foreign Investment Review Board (FIRB), which on March 16 extended its review of the proposal by 90 days. It will provide a recommendation to the Australian Treasurer, Wayne Swan, who will make the final decision.

“The commercial terms we have obtained reflect the banks’ confidence in the excellent potential of our partnership with Rio Tinto and in the long-term prospect of the mining industry,” Xiong Weiping, president of Chinalco, said in the statement.

The Australian Competition and Consumer Commission said on March 25 that it would not block the deal, stating the purchase would not cause an iron ore price slide or lower competitiveness of copper, bauxite and aluminum oxide.

Australia FIRB last week blocked an AU$2.6 billion takeover of OZ Minerals by China Minmetals Group on national security grounds. The country is currently reviewing several major resource company acquisitions by Chinese companies, including Hunan Valin Iron & Steel’s AU$645 million stake purchase in Fortescue Metals Group. 

Full Article in Chinese:  http://www.caijing.com.cn/2009-03-27/110129287.html