ALUMINUM Corp of China (Chinalco) said its stake in Australian miner Rio Tinto Plc held by Lehman Brother is safe, amid reports the collapse of the United States investment bank has put the stake at risk.

"The shares are held in a separate designated account pursuant to a custody arrangement with Lehman Brothers International (Europe)," Chinalco said yesterday.

Britain's Daily Telegraph newspaper has reported that the stake, which Chinalco bought in partnership with US maker Alcoa Inc in February, has been frozen as part of Lehman's liquidation.

"There is no basis on which Chinalco's ownership of the shares could be validly challenged or on which its shares could form part of the general assets of LBIE," it said.

Chinalco said it is discussing with PricewaterhouseCoopers, the administrators of LBIE in London, the arrangements for the orderly transfer of the shares out of LBIE.

The Daily Telegraph said earlier the stake was worth 8 billion pounds (US$13.8 billion) and was stuck in a Lehman custodian account in Hong Kong. The liquidator may decide Chinalco only ranks along with other creditors in Lehman's collapse, and could suffer a substantial loss on its holdings in a worst-case scenario, it said.

Chinalco, along with minority partner Alcoa, bought a 12-percent stake in Rio's London-listed shares for about US$14 billion in February, a move seen to be aimed at derailing a hostile takeover of Rio by Australian peer BHP Billiton. A BHP-Rio merger would form a powerful cartel capable of further controlling the prices and supplies for iron ore.