Local banks to fund Chinalco's rights bid

Chinese banks will fund Aluminum Corp of China (Chinalco) in the $15.2-billion rights issue of Australian mining firm Rio Tinto, media reports said.

China Development Bank (CDB), a policy bank, and Agricultural Bank of China (ABC), one of the four biggest commercial banks in the country, will extend a credit line to Chinalco, which according to both the Financial Times and the Daily Telegraph, was set to subscribe to the issue for around $1.46 billion.

"Negotiations over the financing between CDB and Chinalco have been completed and, I guess, the detailed arrangement will be released soon," reported 21st Century Business Herald yesterday, citing an anonymous person within the banking industry.