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Denial from Sinosteel, Rio 
 
MAJOR miner Rio Tinto says it has no plans to secure funds via a capital raising, while Chinese(cnmining) trading house Sinosteel says it has no issues with capital losses.

Newspaper reports out of the United Kingdom overnight suggested Rio Tinto was planning to raise $US9 billion ($A13.5 billion) in the first half of next year via a rights issue.

However, a spokesperson for the company has said the rumour is simply that, and added that Rio boss Tom Albanese last week said the company would be servicing its onerous debt obligations only via its spending cuts.

Rio has around $US38.9 billion in debt with most of this from its takeover of aluminium business Alcan last year.

Last week Rio revealed it would cut capital expenditure and reduce its contract and permanent workforce by 14,000.

Rio has declared debt reduction a “key priority” and said it aimed to reduce its net debt by $10 billion by the end of 2009. The company’s debt, as at October 31, stood at $38.9 billion.

The miner will be deferring some new developments, and will sell off assets or joint venture projects.

Shares in Rio were last trading at $A39.90, $3.69 or 10% higher in the first hour of trade in Australia.

Meanwhile, Chinese trading house Sinosteel has denied media reports claiming the company stopped taking ore from Rio Tinto’s Channar mine in the Pilbara, forcing the mine to shut down.

A news report in the Sydney Morning Herald on Friday said Sinosteel was taking huge losses thanks to the financial crisis, and had decided not to pay benchmark contract prices for iron ore from the Channar operation, which produces around 10 million tonnes per annum.

As a result, operations at Channar were suspended while Sinosteel purchased on the spot market instead, the report claimed.

According to Reuters reports out of Beijing, Sinosteel said there were no issues with losses but did not give a reason why Channar had been shut down around three weeks.

“At present all projects of Sinosteel’s domestic and foreign businesses are operating normally and stability is being maintained,” a Sinosteel spokesperson told Xinhua, the official Chinese news agency.

The SMH report also claimed Sinosteel’s Mid West iron ore development in Western Australia could also be at risk from Sinosteel’s parlous financial situation and falling iron ore prices, a claim Sinosteel reportedly denied.