Mining major, Rio Tinto (RTP:NYSE), is in some dire straits... It's needs cash and needs it now, or it may have trouble paying a $8.9 billion bill come October 2009. Last year, RTP bought Canadian aluminum company Alcan for $38.9 billion. The company had expected to be able to sell some assets to raise money, but in this environment, it's not happening quickly enough. So RTP may have to resort to other measures, like cutting capex by $1 billion, and slashing its workforce by 14,000, or 13%. Not a good situation, so RTP is considering issuing about $4 billion-worth of new stock. Some analysts thing the company should aim higher, to about $6 or $10 billion... But what does that mean for the value of the company for current shareholders? Technically, the more shares issued, the lower the value of each share. For current shareholders that's like taking out a home-equity loan, and some probably aren't happy about it. On the other hand, if it can keep RTP from defaulting on a loan, or keep its debt to equity ratios in check, then it might be a necessary evil, particularly if the stock is a long-term position in a buy-and-hold portfolio. Traders may want to short the heck out of it, and indeed on this news, shares in Australia fell more than 1.5%. This bad news might smell like an opportunity for some competitors (read BHP Billiton), and I've got an article coming out to Taipan Insider readers explaining one possible scenario. Stay tuned...