Rio Tinto shareholders² and Australian regulators are sure to approve Aluminum³ Corp of China's, or Chinalco's, proposed $19.5-billion investment in the company, its chief executive told China Daily in London.

"I am quite confident that all of the pieces will progressively work through over the coming months. We will of course have regulator approval, and we will have shareholder¹ approval as well," Tom Albanese said.

The proposed investment has been supported by the Rio Tinto board and received an initial approval from the Australian Competition and Consumer Commission, the country's competition regulator, on Wednesday.

It is still subject to approvals by Rio Tinto shareholders and Australia's Foreign Investment Review Board, which announced last week that it would extend by 90 days its probe into the case. The board will submit a recommendation to Australia's Treasurer⁴ who will then finally decide whether the deal is in the country's interest or not.

Albanese, who visited Beijing recently and met with the management team at Chinalco, said Rio Tinto would continue to meet shareholders in Australia, the UK, Asia and North America, to persuade them to approve the deal.

Chinalco's funding is expected to provide financial muscle to Rio Tinto in the midst of a global financial crisis, as the company plans to repay by the end of this year about $10 billion of the $38 billion in debt it has on its books.

Albanese said the management is focusing on the "strategic merit" of the transaction. He said that if the world was heading towards a two-year-long recessionary economy, the investment from Chinalco would be the right financial solution for Rio Tinto. The deal was also mutually beneficial for both companies, he said.

"This is what I can say for the good of Rio Tinto shareholders," he said.

He also said the proposed investment would not affect the ongoing⁵ negotiations⁶ between Chinese steel mills and three major iron ore suppliers, including Rio Tinto, for setting annual iron ore prices. The Chinese side is asking for a price cut of up to 40 percent.

Rio Tinto has faced a backlash from shareholders over the planned investment and Australian lawmakers have begun an inquiry⁷. Barnaby Joyce, an opposition⁸ senator in Australia, also ran an advertising⁹ campaign against the Chinalco investment.

Australian Foundation Investment Co, the largest Australia-based shareholder of Rio, has spoken out against the proposal. Legal & General Plc, the second-largest institutional shareholder in Rio Tinto's UK shares, has called for an alternative proposal.

Rio Tinto's Chief Financial Officer Guy Elliott was yesterday quoted by Bloomberg as saying the mining company will consider selling shares or bonds if shareholders or the Australian Foreign Investment Review Board reject the deal.

He said in Singapore that the company might also sell more assets, reschedule debt or combine the four options under a "Plan B".

Chinalco last month proposed to buy $7.2 billion of convertible¹⁰ bonds from Rio and stakes in iron ore, copper¹¹ and aluminum projects for $12.3 billion. If approved by shareholders and relevant governments, the proposal would result in Chinalco's stake increasing to 18 percent in Rio, from the current 9.3 percent.