Anglo-Australian miner Rio Tinto in 2008 considered selling state-owned Chinalco a 19.9 percent stake in its iron ore operations under a mammoth 40 billion dollar (35 billion US) tie-up, a report said Saturday. The deal was drafted just weeks before rival BHP Billiton dropped a hostile takeover bid due to the state of the global economy, The Weekend Australian newspaper said.
Citing a draft memo from Rio Tinto Australia's then-managing director Stephen Creese to the Foreign Investments Review Board (FIRB), the report said the deal involved Rio spinning off its iron ore operations. "As outlined at our meeting, Robert (Rio) is discussing with Colleen (Chinalco) a confidential proposal that would see Colleen acquire 19.9 percent of Robert's demerged iron ore business and 40 to 45 percent of the remaining business," read the memo, to FIRB member Patrick Colmer. Under the deal, which the report said was valued at up to 40 billion dollars, cash-strapped Rio would have demerged its iron ore operations into a separate company which would have been listed and headquartered in Australia.