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Rio Tinto investors round on management -

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Reporter: Sue Lannin

PETER CAVE: Back to the Rio Tinto AGM now, and shareholders there are angry about Rio's planned
deal with Chinese aluminium producer Chinalco, which will see the Beijing-backed firm double its
investment in the company and take stakes in key assets.

Investors are also up in arms because Rio Tinto's board walked away from BHP Billitons' hostile
takeover offer, which valued the company at more than $160 billion.

For more I'm joined by our finance reporter Sue Lannin, who's at the AGM.

Sue, what are shareholders saying?

SUE LANNIN: Well Peter they're very, very angry, there was a rowdy shareholder meeting last week in
London and it's even more rowdy it seems here. Shareholders have been accusing the Rio Tinto board
and management of selling off the crown jewels in reference to the potential deal with Chinalco.

Now that deal would see Rio sell, would see Chinalco take stakes in key project like the Hammersley
Iron operation, the giant operation there in Western Australia and other big projects. One
shareholder accused the board of dreaming if they thought that Chinalco would not be able to
influence the price of key commodities like iron ore.

Now shareholders are also angry in regards to Rio's takeover of Alcan - that's the Canadian
aluminium producer back in 2007 - that left Rio saddled a debt of around $US40 billion. So, one
shareholder actually accused the management of spurning a top of the market offer from BHP Billiton
to take over Rio Tinto, but then going ahead and buying Alcan at the top of the market.

So the meeting's still going on, it's been going on since about 9.30 and people are pretty angry.

PETER CAVE: It sounds indeed like it's been one of the grumpier AGMs this year, what's Rio's
response been?

SUE LANNIN: Rio Tinto has very much been trying to sell the benefits of the Chinalco deal. Now
Chinalco will take 18 per cent of Rio Tinto, so it will double its stake. It's currently at nine
per cent, it's currently the biggest single shareholder - Tom Albanese says that being in league
with Chinalco will help position Rio when the recovery eventually returns.

It was confirmed today that Chinalco have confirmed their financing for the Rio Tinto deal; so that
would be to inject about $30 billion and also Rio Tinto says it has had a letter from the export
-import bank of China of possibly further assistance to help them expand into other development
projects.

Tom Albanese says that Chinalco will be at arm's length, it will be an arm's length relationship.
He said that Rio Tinto will run Rio's assets; Chinalco will not run Rio Tinto's assets. Now the
company's also saying that it's unlikely there will be any global recovery over the next 12 to 18
months - but they think that investing in China will improve later this year.

So they're really staking their future on this link-up with Chinalco and also expansion in league
with other - with China.

PETER CAVE: So, it's definitely on, there's no wiggle room.

SUE LANNIN: Well - that's... first of all there is the big hurdle - it has to get approval from the
Foreign Investment Review Board. So back in March FIRB was given an extension, a 90-day extension
so that takes the consideration of that deal into June.

So it really is whether the Federal Government thinks ... they're going to have to consider whether
it is in Australia's best interest to have a major customer owning a stake in key resources assets
and whether or not Chinalco would be able to influence price.

So there's no certainty yet and also shareholders have to agree to the deal. They will, a vote will
be put to shareholders if FIRB actually approve that deal. So no certainty as yet.

PETER CAVE: Let's hope they're less grumpy next time.

That was Sue Lannin reporting live from the general meeting of Rio Tinto in Sydney.