Rio may sell stakes in key projects to China to shed debt

Rio Tinto, the mining giant, might think about selling stakes in some key projects to China in order to reduce a part of its $42 billion debt in 2009. Company chairman Paul Skinner has implored the Australian government to be ''open-minded" about foreign ownership.

Speaking in Melbourne, Skinner said it was an option ''in theory'' to sell project stakes to China to pay part of its $9 billion debt that becomes due in 2009. He said the option had not been ''developed'' at this stage, and said that Rio Tinto was not in talks to sell stakes in Pilbara iron ore assets.

"We are not going to do anything that compromises the ability of the organisation to grow. Because iron ore is a key component (of growth plans) we'll pay particular attention to that aspect,'' he said, emphasising that Rio's Pilbara iron ore expansions evaluated closely.

Addressing the Australian British Chamber of Commerce earlier, Skinner voted for executive Tom Albanese's prior address to the Melbourne Mining Club last month that suggested Australia should not be averse to Chinese investment. "I wonder how much smaller the Australian mining industry would be today if it had not welcomed investment from Japan and Korea a few decades ago," Skinner said.

Skinner also said that the Foreign Investment Review Board (FIRB) should boost state-owned investment, provided that scrutinised well.