Rio Tinto walks from Chinalco deal

MINING company Rio Tinto has walked away from what would have been the biggest deal in Australian corporate history, its $US19.5 billion ($24.4 billion) alliance with Chinese resources giant Chinalco.

Instead, Rio Tinto will now seek to raise about $US15.2 billion in a rights issue.

In a statement, the company said the money would be used to cut debt.

Rio Tinto said it would pay Chinalco a break fee of $US195 million and that it hoped to collaborate with the company in the future.

Shares in Rio Tinto have gained nearly 13 per cent to $74.11 after the collapse of the deal.

More to come