Pension fund Scottish Widows Investment Partnership Friday said it welcomed Rio Tinto PLC's (RTP) decision to opt for a $15.2 billion rights issue instead of pursuing a strategic tie-up with Aluminum Corp. of China, or Chinalco.

"We welcome the board's decision to offer shares to existing shareholders via a rights issue," SWIP's head of U.K. equities Robert Waugh said in an emailed statement.

Waugh in February had said the fund, a Rio shareholder, was disappointed that the Anglo-Australian miner had decided to override preemption rights and issue attractive equity to one shareholder without offering it to all shareholders.

Rio Tinto Friday formally abandoned that deal, which would have given the Chinese group minority stakes in a suite of assets for $12.3 billion and convertible bonds valued at $7.2 billion.

Company Web site: www.swip.com

-By Jeffrey Sparshott, Dow Jones Newswires; +44 (0)207 842 9347; jeffrey.sparshott@dowjones.com