Oct 28 (Reuters) - Rio Tinto Plc RIO.L :
* Rio Tinto agrees heads of agreement to sell
* Rio Tinto agrees heads of agreement to sell its stake in Simandou project to Chinalco
* Rio Tinto will receive payments of $1.1-1.3 bln based on timing of development of project
* Initial payment for shares will commence at time of first commercial production, on a per tonne basis
* Heads of agreement sets out proposed principal terms of sale with aim of signing a binding agreement within six months Source text for Eikon: Further company coverage: RIO.L
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