BNamericas reported that Rio Tinto shares rallied after federal treasurer Mr Wayne Swan cleared the way for a Chinese state owned aluminum maker Chinalco's bid to increase its stake in the company.

According to a mining analyst, Rio shares were higher because of expectation that there would be additional demand for the stock. He said that now that Chinalco has permission it is possible the Chinese company will increase its holding to the permitted level.

Mr Swan approved Chinalco's current stake in Rio Tinto of about 9.3% of dual listed Rio Tinto to 11%, giving the Chinese company to influence the outcome of BHP Billiton's proposed USD 175 billion hostile takeover of Rio.