Chinalco's has moved to increase its shareholding in the international mining group Rio Tinto through aggregate cash proceeds of US$19.5bn.

The deal will also entitle Chinalco to nominate two new non-executive Board members (one independent under applicable corporate governance criteria) to add to the fifteen current Board members of Rio Tinto. However, Rio Tinto will retain operational control of the joint venture assets, with "clear governance arrangements and continued commercial marketing of joint venture product while maintaining its commitment to best practice and sustainable development".

Paul Skinner, chairman of Rio Tinto, said: "We have long recognised and welcomed the growing participation of China in the global economy and the opportunities this presents to Rio Tinto. We believe this transaction is a logical step in advancing our capability in the Chinese market and the Boards of Rio Tinto recommend it to shareholders."

The transaction is currently to approval by the shareholders of Rio Tinto, governments and other regulators.

Xiao Yaqing, president of Chinalco, said: "This transaction follows our acquisition of a significant stake in Rio Tinto in February 2008 which laid a solid foundation for our broader strategic partnership. Our objectives are to seek commodity and geographic diversification, with a view to achieving long term financial returns from our investments.

"The strategic partnership with Rio Tinto is a perfect fit with these goals. It aligns us with a leading global diversified miner with superb tier one assets and a track record of innovation."

Before the transaction was formally announced, the chairman designate at Rio Tinto, Jim Leng made a surprise resignation. However, while Rio Tinto would not confirm the reason for the resignation, the announcement of the deal was met with some concerns from a number of analysts.

The worries centre on the whether the deal represents good value for Rio Tinto, as it means the issue of convertible bonds to Chinalco, which would, if converted, allow Chinalco to increase its existing shareholding in Rio Tinto to 19% in Rio Tinto plc and 14.9% in Rio Tinto Limited, equivalent to an 18% interest in the Rio Tinto Group.