Nationals senator Barnaby Joyce has welcomed the apparent collapse of a multi-billion dollar deal between Rio Tinto and Chinalco.

Shares in Rio have entered a trading halt pending an announcement about the status of the deal with China state-owned Chinalco.

Reports overnight from London and Beijing said the $US20 billion ($A25 billion) deal between the Australian and Chinese mining giants had fallen apart.

Senator Joyce said it was good news for Australia.

"It is great for the Australian people that this deal falls over and we do not have the complications of the Communist People's Republic of China's government owning the wealth of Australia," he told reporters in Canberra on Friday.

"This would, obviously, be to the benefit of the Chinese people ... but it would have been to the detriment of the Australian people."

Rio Tinto turned to Chinalco in February to help repair a balance sheet weighed down by $US38.7 billion ($A48.36 billion) in debt. A payment of $US8.9 billion ($A11.12 billion) is due in October.

Under the deal, Chinalco would invest $US12.3 billion ($A15.37 billion) in joint investments in aluminum, copper and ore mining with Rio Tinto, and spend $US7.2 billion ($A9.0 billion) on convertible bonds in the company.

If redeemed for shares, the bonds would almost double Chinalco's existing 9.3 per cent stake in Rio Tinto Group to 18 per cent.

Australia's Foreign Investment Review Board was due to make a decision on the deal, based on national interest, by the middle of this month.

However, Treasurer Wayne Swan would have had the final say.

Senator Joyce said the move saved Labor from making a difficult foreign policy decision.

"What I do feel very annoyed about is we really had to rely on the stuff-up in the management expertise of Rio for the deal to fall over rather than the decision of the Australian parliament," he said.

He called for changes to the review board's guidelines to prevent a similar deal potentially being approved in future.

Senator Joyce said he was not convinced by assurances from Chinese officials that the deal was purely good business.

"Another nation's government purchases things not for a corporate reason but for a long-term strategic reason," he said.

"They purchase so that their own nation becomes a benefactor of that wealth into the future."