"Sorry," Rio Tinto told its would-be Chinese investor on Friday. "No deal now."

The Aluminum Corp of China (Chinalco) confirmed the collapse of a deal to invest $19.5 billion in the Anglo-Australian mining company, with general manager Xiong Weiping saying he was "very disappointed".

The world's third largest mining company will now pay Chinalco $195 million as compensation for termination of the deal.