Rio Tinto, the mining group, on Thursday unveiled plans to receive a $19.5bn cash injection from Chinalco, the Chinese aluminium producer.

The deal, involves the sale of minority stakes in some of Rioâ??s mining assets and the issue of convertible bonds. It marks the biggest ever investment by China in a foreign company.

Chinalco will buy $7.2bn in convertible bonds, which will convert into Rio shares at a later date. That would increase its stake in Rio from 9 per cent to 18 per cent. The rest of the capital injection comes from the sale of minority stakes. The Chinese group will also set up a $1bn joint venture to develop other projects with Rio, with each committing $500m.

The deal comes less than a week after Jim Leng abruptly quit as chairman-designate of Rio following a disagreement with Tom Albanese, chief executive, over a deal with Chinalco.

Rio said it had reduced net debt by $6.5bn to $38.7bn at the end of last year. The companyâ??s need to pay down debts has driven the partnership with the Chinese state-owned company.

Mr Leng favoured a large rights issue as the solution to Rioâ??s debt problems.