Aluminum Corp. of China, the largest shareholder in Rio Tinto Group, is seeking representation on the board of the world's third-biggest mining company, reversing a stance it took when it first bought a stake two years ago.

''We are actively seeking'' board membership, Chairman Xiong Weiping, said in an interview today in Beijing, without giving a timetable or how many seats are sought. The Chinese company, also known as Chinalco, is the nation's largest producer of aluminum.

Chinalco is seeking board representation after Rio Tinto last June rejected an additional $US19.5 billion ($21.6 billion) investment from the Chinese company in favor of a share offer and joint venture with rival BHP Billiton Ltd. China is London-based Rio's single largest market, accounting for almost a quarter of sales.

The Chinese company and Alcoa Inc. jointly bought a 9 per cent stake in Rio in 2008 for 7.2 billion pounds ($12 billion). At that time, Rio's Chief Executive Officer Tom Albanese told investors Chinalco wasn't seeking a board seat. Rio was planning to offer the Chinese shareholder two seats had the $US19.5 billion investment last year succeeded.

Rio Tinto spokesman Tony Shaffer wasn't immediately able to comment when contacted at his Melbourne office today. Rio's shares rose 0.8 percent to $75.02 in Sydney.

State-owned Chinalco later bought Alcoa's stake in Rio.

Measures by the Chinese government to tighten lending ''will have some impact on companies,'' Chinalco's Xiong also said today while attending the National People's Congress.

The Chinese economy expanded 10.7 per cent in the last quarter of 2009, the fastest pace since 2007, helped by record lending. The government has ordered some banks to pare loans, raised the ratio banks must set aside as reserves and guided bill yields higher in an attempt to avert an asset bubble from building.
 

Source: Bloomberg