rio-chinalco deal collapse good for indophil

"Collapse of Rio-Chinalco deal may boost copper tagsBy Anne RileyPublished: Jun 5 2009 5:5PM

China will increasingly be forced to turn to the spot market to satisfy its appetite for copper following the failure of a controversial investment deal with Rio Tinto Plc, potentially boosting prices of the red metal, analysts said.

The collapse of the deal, which would have given state-owned Aluminum Corp. of China (Chinalco) a minority stake in some of the mining company's key copper assets, including the massive Grasberg and Escondida mines, has dealt a blow to China's ambitions to secure a steady supply of natural resources.

"If I was a senior Chinese government official wanting to be using copper, I'd be a little bit worried," one analyst said.