Rio Tinto shareholders angry at CEO

Angry Rio Tinto Ltd shareholders have labelled as "completely wrong" suggestions by
chief executive Tom Albanese that investors are warming to the Chinalco deal.
London-based Mr Albanese is in Australia meeting investors in Sydney and Melbourne
where he told analysts on Tuesday that initial shareholder opposition in the UK
appeared to be moderating.
However, a major unidentified institutional shareholder in London told The Daily
Telegraph the claims were "completely wrong" and that a number of institutions would
still vote against the deal.
Ironically, Mr Albanese told analysts in Sydney that Rio Tinto directors were
"listening to shareholders".
Under the controversial deal that will reduce some of Rio Tinto's massive debt,
Chinalco will pay $US12.3 billion ($A18.95 billion) for a number of Rio Tinto's iron
ore, aluminium, bauxite and copper assets.
Chinalco will also provide $US7.2 billion ($A11.09 billion) for convertible bonds,
should the agreement get approval from regulators and shareholders.
Rio Tinto's board has unanimously recommended the transaction, allowing Chinalco to
appoint two new non-executive board members and increase the company's stake in the
dual-listed miner from nine per cent to 18 per cent.
The $US19.5 billion ($A30.05 billion) transaction with Chinalco drew the ire of Rio
Tinto's British investors, who expressed disquiet over not being offered the chance
to participate in a rights issue.
It has also sparked some concerns that Rio Tinto is selling assets cheaply to China.
Mr Albanese told Sydney-based analysts that the quantum of the Chinalco deal makes
it more attractive than other options, including a $US10 billion ($A15.41 billion)
rights issue, the greater the economic uncertainty becomes.
Rio Tinto will use the capital injection to help tackle the $US38 billion ($A58.55
billion) mountain of debt it incurred buying Canadian aluminium producer Alcan Inc
in 2007.
Detractors aside, the Chinalco deal has attracted its share of backers.
Pengana Capital fund manager Ric Ronge, whose investment firm holds BHP Billiton and
Rio Tinto shares, said it provided strategic benefits to the global miner and was
the best outcome given its financial situation.
"We never really had any big issues with the deal, we thought it was the lesser of
two evils," Mr Ronge told AAP.
"Strategically, especially if the world stays weaker, Rio Tinto will be
well-positioned in terms of seeing deals sooner than others and will have a very big
backer to help them to be opportunistic in this environment."
Mr Ronge, however, won't be meeting with Mr Albanese when he touches down in
Melbourne to brief investors.
"We'd like a meeting," he said.
"We asked when he was coming to town but we couldn't even get an answer whether he
was heading to Melbourne."
Fat Prophets also believe there are real long term benefits to be gained from the
strategic alliance.
"Rio in our view is neither selling the farm cheaply, nor surrendering control over
its operations, nor its bargaining strength when it comes to obtaining the best
price possible for its broad range of commodities."
The global charm offensive by Mr Albanese coincides with a whirlwind trip to
Australia by the newly appointed Chinalco president Xiong Weiping who met Foreign
Investment Review Board (FIRB) officials on Tuesday.
Rio shares closed $2.28 higher at $45.75.