Overview
Strategic partnership investments
Chinalco will invest US$12.3 billion in aluminium, copper and iron ore strategic alliances in the form of strategic alliance notes or equity. The strategic alliance notes are synthetic instruments which track the cash generated by the assets and give a return based on the cash generated, taking into account Chinalco's level of investment.
The businesses and assets, and Rio Tinto and Chinalco's resulting economic interests, are set out in the table above. Further details on the Group's businesses and assets are set out in Production & reserves.
Chinalco's investments will be made through participation in the relevant Rio Tinto entities which own these assets, and the form of that investment will vary between each entity. If the transactions involving certain assets do not complete on the date on which the transactions involving Hamersley Iron, Weipa, Yarwun and Escondida (in certain circumstances) and the convertible bonds complete, Chinalco will pay certain sums into escrow which will then be paid to Rio Tinto on completion of the transactions involving those particular assets.
|
Business |
Strategic partnership |
Rio Tinto's existing economic interest | Chinalco's proposed share of Rio Tinto's economic interest | Rio Tinto's resulting economic interest |
|---|---|---|---|---|
| Weipa | Aluminium | 100% | 30% | 70% |
| Yarwun | Aluminium | 100% | 50% | 50% |
| Boyne | Aluminium | 59.4% | 49% | 30% |
| Gladstone Power Station | Aluminium | 42.1% | 49% | 21.5% |
| Escondida | Copper | 30% | 49.75% | 15% |
| Grasberg | Copper | 40% | 30% | 28% |
| La Granja | Copper | 100% | 30% | 70% |
| Kennecott Utah Copper | Copper | 100% | 25% | 75% |
| Hamersley Iron | Iron Ore | 100% | 15% | 85% |
| Development Fund1 | 50% |
1 The Development Fund will be jointly owned by Rio Tinto and Chinalco. The US$500 million included in the transaction is for the acquisition of project developments, including from Rio Tinto.
