Rio Tinto in talks on $9 bln from China-report

LONDON Feb 1 (Reuters) - Rio Tinto (RIO.AX) (RIO.L) is in talks to raise up to $9 billion from Chinalco, the state-owned Chinese aluminium company which already holds an 11 percent stake in the miner, The Sunday Times reported without citing sources.

The capital injection was intended to address growing concerns about the company's debt, the newspaper said, adding that the Chinese company was planning to buy minority stakes in Rio's mining assets.

Chinalco was also considering increasing its stake in Rio to at least 15 percent, which could be done through a placing to raise about $1 billion, The Sunday Times said.

The debt-laden miner agreed to sell assets in South America to rival Vale (VALE5.SA) of Brazil on Friday for $1.6 billion, sending its shares climbing as investors saw the prospect of a rights issue receding. [ID:nSYD429108]

However, if Rio failed to agree terms with Chinalco it would go direct to investors to raise $9 billion, The Sunday Times said.

Rio, which has a $39-billion debt burden, saw its rival Xstrata (XTA.L) announce plans to raise about $5.9 billion by issuing new shares on Thursday. [ID:nLT603843]

Rio said earlier in the week it did not rule out selling shares, backpedalling on Chief Executive Tom Albanese's previous assertion that there was no need for a rights issue to meet his debt-cutting target.

Rio Tinto declined to comment on the report.

(Reporting by Paul Sandle)