Aluminum Corp. of China, or Chinalco, confirmed Friday that Australian mining firm Rio Tinto has scrapped the proposed $19.5 billion of investment by Chinalco, and Rio Tinto would pay a break fee of $195 million to the Chinese aluminum maker.

Chinalco Chairman Xiong Weiping said the company is "very disappointed" at the result, as it has been making constructive efforts in negotiation and has made appropriate revisions to the deal the two sides entered into on February 12 this year.

Xiong said Chinalco maintained that the deal would be a good opportunity to create value for the shareholders of Rio Tinto and would pave the way for long-term strategic cooperation between the two companies.

In February, Chinalco signed an agreement to invest $19.5 billion in Rio Tinto to secure resource supplies for China and help cut Rio's heavy debt. The deal would have been the largest single foreign investment by a Chinese company.

Under terms of the planned deal, Chinalco would have invested $7.2 billion in convertible bonds and $12.3 billion in Rio Tinto iron ore, copper and aluminum stakes. That would have raised its stake to 18 percent from 9 percent.

(Xinhua News Agency June 5, 2009)