Chinalco more likely to raise Rio stake than cut it

By Alfred Cang and Li Hongwei

SHANGHAI (Reuters) - Chinalco, the Chinese metals company that led a stunning $14 billion investment in Rio Tinto Plc (RIO.L: Quote, Profile, Research, Stock Buzz), could raise its stake in the global mining firm and has no intention of cutting back on its ambitions elsewhere.

"We have set the target of building up a first-class global enterprise, a brand that stands for 100 years," Chinalco's president Xiao Yaqing told a group interview in Shanghai.

"And we've realised the brand will only stand for 100 years if we own mining assets, and not just smelting facilities."

Chinalco burst onto the world stage six weeks ago with the Rio (RIO.AX: Quote, Profile, Research, Stock Buzz) purchase it made jointly with Alcoa Inc (AA.N: Quote, Profile, Research, Stock Buzz), gatecrashing a takeover plan by Rio's rival BHP Billiton (BHP.AX: Quote, Profile, Research, Stock Buzz) (BLT.L: Quote, Profile, Research, Stock Buzz) at the last moment before BHP unveiled its own, lower bid.

The purchase of 12 percent of Rio's London-listed shares for $14 billion, or almost 60 pounds a share, was widely seen as a deliberate move to stymie BHP's bid.

"I feel the price was very good. It was a very appropriate price. The price was not high considering Rio's value," Xiao said. "In the current circumstances, the possibility of raising the stake is higher than cutting it."

Rio's shares opened 3 percent higher after he spoke and were trading at 52.23 by 5:26 a.m. EDT.

CHINALCOA