Rio Tinto Plc's (RTP) Chief Financial Officer Guy Elliott Friday said the miner's recapitalization via a US$15.2 billion rights issue, larger than originally planned, will give it greater flexibility for its asset sale program.

It will also allow the Anglo-Australia miner to increase capital spend during 2009 from an originally announced US$4 billion, Elliott said during an analyst call.

Rio announced the rights issue Friday, and at the same time called off a US$19.5 billion deal with its largest shareholder Aluminum Corp. of China, or Chinalco. The company also announced a non-binding agreement with BHP Billiton Ltd. (BHP) to form a 50/50 joint venture for its Pilbara iron ore assets.

Elliott stressed that the Pilbara JV would cover production only, not marketing.

The combination of Rio's and BHP's Australian iron ore assets was the biggest stumbling block in obtaining European Union competition regulator approval for BHP's failed takeover offer for its smaller rival.

"Marketing is going to be separate. This is a production union only. We would hope that regulators recognize that," Elliott said.

-By Elisabeth Behrmann, Dow Jones Newswires;

61-2-8272-4689 elisabeth.behrmann@dowjones.com