Under the transaction terms Chinalco will invest $US12.3 billion across a range of Rio’s assets while a two-tranche convertible bond will be issued to a total of $7.2 billion.

If converted, the bonds would lift Chinalco’s stake in Rio to 19% of the London-listed entity and 14.9% in Rio Tinto Limited. This is equivalent to an 18% stake in the Rio Tinto Group.

The deal will see Chinalco take a 30% stake in the Weipa bauxite operation in Queensland and 49.75% share in Rio's stake of the massive Escondida copper mine in South America.

Other assets involved in the transaction include the Gladstone power station and the Yarwun and Boyne operations in Queensland, the Hamersley Iron operation in the Pilbara, the Grasberg copper-gold mine in Indonesia,the La Granja project in Peru, and the Kennecott copper mine in the United States.

Rio said the Chinalco partnership would serve to reduce its debt burden, strengthen its balance sheet, and better position it to chase other investment opportunities.

Chinalco will be able to nominate two members to the Rio board.