The Exit of Rio Tinto and Chinalco Top Men

By Wan Xiao Xiao, Lin Li
Published: 2009-02-10

Global mining giant Rio Tinto and China's leading aluminium producer Chinalco, which are engaged in the final stage of assets sales talks, have both announced the exit of its top-level personnel.

Barely a month after being appointed, Rio Tinto's chairman-designated Jim Leng resigned from the post he was supposed to take over in April, reportedly due to disagreement over how to resolve the company's 39 billion US dollars debt burden.

The company has been discussing with Chinalco (Aluminium Corp of China) to raise funds, including options for the latter to acquire minority interests in various operating businesses of the Rio Tinto group and invest in convertible instruments.

The Wall Street Journal reported on Tuesday that Leng opposed to what he called a "Chinese solution" to the problem, and he preferred to raise funds through issuance of new shares.

The London-headquartered Rio Tinto, the world's third largest miner, released a notice on its website on Monday, stating that the existing chairman Paul Skinner would remain until mid 2009, when a new successor would have been found.

Meanwhile, Chinalco has confirmed on Monday that its president Xiao Yaqing - the man credited for taking the company to the world stage - will step down soon after five years at the helm.

Words have it that the 50-year-old Xiao would be appointed to high official post in the Chinese State Council after leaving the state-owned firm.

His will be succeeded 52-year-old Xiong Weiping, president and vice chairman of China Travel Service Holding (Hong Kong). Xiong was once with Chinalco and held the post of vice-president.

The challenges awaiting Xiong at Chinalco would be tough under the current economic condition, and the Rio Tinto deal could also be trying. A year ago, Chinalco had acquired 9% of Rio Tinto for 14 billion US dollars but the investment has since shed over half of its value when the latter stock prices plunged.

The on-going global financial storm has also hit Chinalco, which sales revenue last year dropped 4.3% to 126 billion yuan compared to the previous year.

As of the end of June 2008, its assets totaled 377.7 billion yuan, making it the world's second largest alumina producer and the third largest primary aluminum producer.