Rio Tinto chief, from hunter to hunted

Rio Tinto mining company Chief Executive Tom Albanese speaks during an interview with Reuters in Lima Marc 16, 2008.

SYDNEY (Reuters) - Tom Albanese, chief executive of Anglo-Australian miner Rio Tinto, knows just how the hunter can quickly become the hunted.

Just over a year ago, barely six months into his job, the collegiate-looking American orchestrated the $38 billion acquisition of Canadian aluminum-maker Alcan. Metal prices were racing higher and Rio Tinto was setting the pace.

Now, that deal is a heavy stone around Albanese's neck and he is surrounded by vultures. Metal prices have plunged 40-60 percent, Rio Tinto is saddled with $39 billion in debt and he has little choice but to sell assets in order to repair its finances.

Albanese, once confident enough to spurn an all-share bid worth almost $200 billion from bigger rival BHP Billiton, is now entering into what some shareholders and politicians regard as a kind of Faustian deal with China.

In agreeing a $19.5 billion cash injection from state-owned Chinalco, Rio is taking Beijing's money -- reportedly much more than it could otherwise expect in a depressed market -- in return for giving China a seat at the mining industry's top table.

"They think they can sell less than a controlling interest in their assets and still control them. They think they will still rule the roost and have money in the tin but that seems crazy," Warren Staude, investor adviser with Taurus Funds Management.

The good times started to sour for Albanese last November when BHP pulled its offer amid tumbling commodity prices, looming world recession and the daunting prospect of having to refinance Rio's debts. Rio's shares immediately fell by more than a third.

"BHP has been a high," Albanese said at one point in the BHP saga. In hindsight, he was right.

It was all downhill from there.

Albanese, 51, a trained geologist who loves the outdoors, left home in the eastern U.S. state of New Jersey to study in Alaska.

PANNING IN ALASKA

One of his first jobs after college was traipsing across remote Alaska snowfields staking mining claims with his future wife, Mary.

He was chief operating officer of another mining company, Nerco, when it was acquired by Rio in 1993. In need of a job, Albanese jumped at the chance to return to his beloved Alaska to pan for gold and silver for Rio, even though he was being paid less money than he was making at Nerco.

With a bachelor's degree in mineral economics, and a master's degree in mining engineering from the University of Alaska, Albanese was eventually sent globetrotting for new investments in Russia, Peru and Mongolia before being named chief executive last May when his predecessor retired.

At some point, Albanese discovered Britain's network of canals, used to shift raw materials and finished goods around the nation during the Industrial Revolution.

These days for leisure, rather than camping in Alaska, Albanese tours Britain's inland waterways in his own canal narrow boat -- a precursor to the behemoths that shuttle coal and iron ore across the oceans today.

(Additional reporting by Bruce Hextall, Editing by Mark Bendeich and Valerie Lee)