Sydney: Anglo-Australian miner Rio Tinto PLC on Friday ended its $19.5 billion deal with Chinese company Chinalco, instead saying it plans to raise $15.2 billion in a share sale.

Rio Tinto chairman Jan du Plessis said in a letter to shareholders the planned deal with Chinalco was now dead and his company would pay it a $195 million break fee.

Investors will be offered 21 new shares for every 40 they hold at A$28.29 ($22.71) each, the company said in a statement posted on the Australian stock exchange. Rio Tinto said the share deal would reduce the company’s overall debt, allowing it to meet repayment obligations.

Rio Tinto turned to Chinalco in February to help repair a balance sheet weighed down by $38.7 billion in debt. A payment of $8.9 billion was due in October.

Under the now-scrapped deal, Chinalco would have invested $12.3 billion in joint investments in aluminum, copper and ore mining with Rio Tinto, and spent $7.2 billion on convertible bonds in the company. If redeemed for shares, the bonds would have almost doubled Chinalco’s existing 9.3% stake in Rio Tinto Group to 18%.

But there has been speculation about the status of the deal for several weeks as the market has changed significantly since the deal was first struck.

In a statement, Chinalco president Xiong Weiping said he regretted the termination of the deal.

“In recent weeks Chinalco has worked hard to respond constructively and engage with Rio Tinto to make appropriate amendments to the transaction terms ... to better reflect the changed market background and feedback from shareholders and regulators,” he said.

“We continue to believe our proposal presented an outstanding value-creating opportunity for all Rio Tinto shareholders and would have provided a strong platform for a long term strategic partnership between the two companies,” he said.

Earlier Friday, Rio Tinto and its rival and former suitor BHP Billiton announced they will set up a joint production venture comprising all of their iron ore assets in Western Australia state, a move expected to save them billions.

The companies have signed a nonbinding agreement to establish the 50/50 joint venture, which covers all current and future iron ore assets and liabilities.

“Both companies believe the net present value of these unique production and development synergies will be in excess of $10 billion,” BHP Billiton and Rio Tinto said in a joint statement.

Also, BHP Billiton will pay Rio Tinto $5.8 billion to equalize its contribution to the joint venture at 50%.