Rio's Leng Quits, Not to Become Next Chairman

Rio Tinto non-executive director Jim Leng has quit the board and will not move into the chairman's role as planned, adding to the global miner's woes as it struggles to cut its $39 billion in debt.

Rio has been trying to sell assets and has cut jobs and projects to meet a target of reducing debt by $10 billion this year, but the sales have taken longer than expected amid the global economic slowdown.

Rio has been under pressure to cut debt after bigger rival BHP Billiton scrapped a hostile takeover bid last November.

Leng, who is deputy chairman of Tata Steel, was named as Rio's next chairman just over three weeks ago.

Current chairman Paul Skinner at the time said he would step down earlier than planned, after the group's Australian annual meeting in April. He will now remain in the post until mid-2009 to allow time to appoint a successor, Rio Tinto said on Monday.

"Paul Skinner staying on longer could be a positive as Rio is not yet through its turmoil. It's yet to deal fully with its debt, iron ore negotiations are going on and things have yet to settle down," said Peter Chilton, analyst with Constellation Captial Management in Sydney.

Skinner was considered the preferred candidate to take over as chairman of British oil giant BP in April, but some shareholders have raised concerns about the planned appointment in light of Rio's woes, according to recent news reports.

Chinalco To Reach Rio Deal Soon

Separately, state-owned Chinese aluminium giant Chinalco is expected to reach a multi-billion dollar deal to buy assets from Rio this week, a Chinese newspaper reported on Monday.

The Economic Observer quoted unnamed sources as saying that barring unforeseen events, a deal was expected to be reached before this Thursday, when Rio is due to announce is second-half earnings.

In addition to buying assets from Rio, Chinalco would invest in convertible bonds issued by Rio, the newspaper said without giving any details.

It said China's sovereign wealth fund, China Investment Corp (CIC), wished to take part in the deal, but its participation was not a priority. Both Rio and Chinalco have denied that CIC will participate, the newspaper said.

Rio said last week that it had held talks with Chinalco, its biggest shareholder, to sell some assets reportedly worth up to $8 billion to cut debt, but added that a deal was not definite.

Chinalco, parent of listed aluminium producer Chalco, was in talks with China Development Bank to secure financing for a deal with Rio, sources with direct knowledge of the situation told Reuters last week.

Rio Tinto , due to report its annual results on Thursday, had no further comment on the statement, a spokeswoman said.

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