Rio Tinto is a world leader in finding, mining and processing the earths mineral resources. The Groups worldwide operations supply essential minerals and metals that help to meet global needs and contribute to improvements in living standards. Rio Tinto encourages strong local identities and has a devolved management philosophy, entrusting responsibility with accountability to the workplace. Major products include aluminium, copper, diamonds, energy products (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc and zircon), and iron ore. The Groups activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa. Rio Tinto comprises wholly owned subsidiaries (such as Borax, Comalco, Hamersley, Rio Tinto Coal Australia, Kennecott and Rio Tinto Iron & Titanium), partly owned subsidiaries (Coal & Allied and Palabora) and non-managed, (Escondida) and joint ventures (Grasberg) in which public shareholders, other companies or governments are partners.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 31/12/2005)

Iron:        29%
Coal:       19%
Copper     18%
Aluminum: 14.5%
Minerals:  12.5%
:              6%
Misc:        1%

a modest punt in RIO could reap profit even if a rights issue is on the cards ..... any such issue will for sure be priced attractively, and if no rights issue but say a JV with BHP, then again, it can't be bad

Business Financial Newswire
Aluminum Corporation of China (Chinalco) is disappointed at Rio Tinto's decision to terminate the co-operation agreement signed in February.

Chinalco president Mr Xiong said: "In recent weeks Chinalco has worked hard to respond constructively and engage with Rio Tinto to make appropriate amendments to the transaction terms announced in February to better reflect the changed market background and feedback from shareholders and regulators.

"As a result, we are very disappointed with this outcome.

"We continue to believe our proposal presented an outstanding value-creating opportunity for all Rio Tinto shareholders and would have provided a strong platform for a long term strategic partnership between the two companies.

"Chinalco will continue to explore opportunities to advance its strategic objectives and in the meantime will monitor developments at Rio Tinto as the company's current largest single shareholder.

"We note the announcement of the joint venture in the Pilbara between Rio Tinto and BHP Billiton and will continue to monitor developments in relation to this project."

"Rio Tinto shares soared as it scrapped its controversial $19.5bn refinancing deal with Chinese firm Chinalco and instead launched a $15.2bn rights issue and a merger of its West Australia iron ore assets with those of bitter rival BHP Billiton.

Institutional investors angry at the Chinalco agreement welcomed the decision, though it raises questions on the future of chief executive Tom Albanese, who was a strong backer of the Chinalco plan.

Terms of the rights are 21 New Rio Tinto plc Shares for every 40 existing shares at 1,400 pence per share, a 48% discount, and 21 New Rio Tinto Limited Shares offered for every 40 existing shares at A$28.29 each.

As part of the iron ore deal, BHP Billiton will also pay Rio $5.8bn to equalise the value of the assets being placed intothe venture. It will now run on a 50:50 basis.

Rio Tinto will also pay Chinalco an agreed break fee of $195m because of the termination of the agreement.

The group also announced its results for the three months to March with pre-tax profit slumping to $2,433m from $4,169m before on gross sales that fell to $9,538m from $13,236m."

UPDATE:Steelmakers Say Rio-BHP Iron Ore JV Should Be Blocked





(Adds background)

LONDON -(Dow Jones)- Steelmakers Friday called on relevant competition authorities to "seriously examine" BHP Billiton Ltd. (BHP) and Rio Tinto PLC's (RTP) proposed iron ore joint venture, saying it should be blocked even in its revised form.

"We are again calling on competition authorities to seriously examine the obvious implications for future pricing regimes and the competitive environment for iron ore," Ian Christmas, director general of the World Steel Association said on behalf of steel producers worldwide. The association's members represent around 85% of the world's annual steel production.

"At present we cannot see how this JV could be in the public interest and thus it should not be allowed to proceed," he said.

BHP and Rio Tinto Friday announced plans to create a 50-50 joint venture that would generate $10 billion in synergies by operating the pair's adajacent mines in the Pilbara region of Western Australia as a single operation, streamlining rail haulage, and optimizing future growth.

The joint venture is structured differently from last year's proposed merger of Rio Tinto and BHP's entire businesses. Whereas the merger would have led to the creation of a single iron ore business, under the terms of the joint venture agreement, Rio and BHP will keep their marketing divisions independent and separate from each other and the joint venture, thereby limiting the possiblity for price collusion.

Steelmakers, who rely on iron ore to make steel, are concerned that the joint venture would conentrate too much iron ore production within the hands of a single entity. Rio Tinto and BHP together accounted for 33% of the world's 2007 sea-borne iron ore trade, according to the latest figures from the association. The top three producers, including Brazil's Vale SA (VALE), account for 69.2% of the world's seaborne iron ore trade.

BHP Chief Executive Marius Kloppers said he expected the 50/50 joint venture to be notifiable to the European Union but added that the deal should present less anti-trust issues than last year's proposed merge.

"Firstly, the scope is very different. It excludes mines such as Samarco or (the Rio project) Simandou. It is also truncated in completeness of business scope," Kloppers said during an analyst call.

Under the terms of the agreement, Rio and BHP will set up a separate marketing body that will share no pricing knowledge with its owners.

Company Web site: http://www.worldsteel.org

Down 20% this morning. Presumably something to do with the rights issue?

Bought some at 2270 though possibly better to have waited for 20, or 10, or 5 we shall see...

does anyone think that the RIO will have trouble raising the money through the 21-40 offer?

I got the impression that shareholders were very pleased that the Chinalco deal was scrapped, so presumably they realised that the other option now was to go cap in hand to shareholders. I imagine the institutional investors will be happy to scoop up the rights which are not taken up by the private lot.

Possibly a bit premature, Falco. Currently 2172p & still nudging down.

Agreed

Ditched it, rio trades always seem to go pear shaped for me!

Been there, done that! Was possibly worth averaging down as likely to be a bounce???

RIO always pretty scary to trade as it can often zip up ior down by 200 or more.
anyway, currently looking pretty chirpy on the back of iron ore prices on the rise.
if final dma (25) can be firmly breached, then potential plenty of upside

for a similar reason, now look at POG which has already made a breakout

RIO now looking very nice indeed ....... as i mentioned on another thread, RIO make a very interesting if scary stock to trade, provided you stay nimble and awake ..... i would hazard a guess that 2800 or even 3000 are the next resistances, though i doubt whether i shall be foolhardy enough to stay in that long, at least with my current complete holding ...... a decent profit is a decent profit, but only when banked!

In answer to your point on the SOLA thread, the RIO/BLT/Chinalco/Alcan merger/takeover/joint venture rumour still worries me where this stock is concerned & also their huge debt pile. But as you say, probably worth a short term flutter

to my mind, RIO are a bit like the black market sardines ..... they're for trading, not eating!

I was talking to a golfing pal last week, who made a bomb during the Dotcom boom and is now retired prior to reaching the age of 50. He mentioned that Rio and other premium mining stocks tend to remain within Bollinger Bands. As you can see from the chart RIO is pushing the upper limit and is also facing the 200 MA resistance level. Wonder if tomorrow will be a 'Trader's' down day?

did not see that, but as a precaution, sold 50% this afternoon at a good profit ..... also sold 30% of my TLW holding again to lock in a good profit

Ah, that's why you have me to do your TA for you Ricardo!

just shows that my old woman's intuition was reasonably founded! .... felt that there was a decent profit to be had, and all too easy to find it has disappeared.

interesting about the bolli bands .... i checked RIO going back over 5 years, and it is indeed true .... however, as i am not sure how these bands work, it may be almost self-fullfilling