Not a watertight deal

Rio Tinto’s shareholders are understandably unhappy about the Anglo-Australian mining group’s planned $19.5bn debt-cutting capital issue and asset sales to Chinalco. But the shareholders don’t have to be passive. The deal with the Chinese state-owned company can and should be defeated. In the agreed deal, Chinalco could end up owning 18% of shares, if it exercises the conversion option on the $7.2bn of bonds it will buy. Add in two board seats and there is a risk that Chinalco, which should be s...