Chinalco may raise Rio stake if conditions right

By Alfred Cang and Li Hongwei

SHANGHAI (Reuters) - Chinese aluminium maker Chinalco said on Monday it may increase its minority stake in Anglo-Australian miner Rio Tinto (RIO.AX)(RIO.L) if market conditions are right, but has no timetable for such a move.

"Under the right market conditions, this is an option, it is possible. But we have not decided when. It will depend on the timing of opportunities in the market and our requirements," company president Xiao Yaqing told reporters in Shanghai.

"A key requirement for the company is to preserve its opportunities and possibilities as we become more international."

Chinalco, formed five years ago through the consolidation of more than 60 aluminium smelters, bought 12 percent of Rio's London-listed shares, or 9 percent of Rio Group's total equity, in January, jointly with U.S. aluminium firm Alcoa (AA.N).

The companies have Australian government approval to raise their combined stake to 14.99 percent of the Rio shares, or around 11 percent of the Rio Group. Rio is listed in both London and Australia.

Rio Tinto is trying to fend off a $150 billion (83.1 billion pounds) takeover bid from bigger rival BHP Billiton (BHP.AX) (BLT.L), which is awaiting clearance from Australian and European regulators, due later this year, before formally launching an offer.

Chinalco's Rio stake purchase was widely seen as a deliberate move to stymie BHP's bid, but Xiao gave no direct indications whether his company would oppose a takeover.

"We will say yes if we think it will yield positive results for us, and no if we don't think so," he said.