Leng Quits Rio Tinto

Jim LengJim Leng, appointed as a non-executive director at Rio Tinto and the chosen successor to chairman Paul Skinner less than a month ago, has resigned from the mining group “with immediate effect,” according to a company statement.

Skinner has agreed to remain as chairman until mid 2009, by which time it is anticipated that a successor will be appointed. The process to appoint a new chairman is underway.

According to media reports, Leng’s was the result of disagreements over a management-backed plan to reduce a $39 billion debt, run up while fending off a takeover by BHP Billiton, the largest mining company by production.

The board is reportedly leaning toward a sale of convertible debt and minority stakes in some mining operations to Aluminum Corp. of China, known as Chinalco. Leng reportedly preferred to raise funds by issuing new shares.

The deal between Rio and Chinalco are discussing a deal to sell asset stakes worth between $11 billion $15 billion and raise an extra $5 billion to $9 billion in convertible notes to give the Chinese aluminium giant a 15-20 percent stake in Rio, according to the Australian newspaper.