29 Nov 2007

World's biggest mining company looking at buying Rio Tinto

10:54 am on 29 November 2007

Melbourne-based BHP Billiton, the world's biggest mining company, has proposed an all-share deal to buy London-based Rio Tinto, in what would create a vast resources company.

The Chinese government says it is closely watching the bid by BHP Billiton amid concerns iron ore prices will remain stable if the two companies merge.

Rio Tinto has so far rejected a BHP Billiton proposed bid of three of its shares for every Rio Tinto share, valuing the target at about 124 billion US dollars saying it is "way out of the ball park".

Both companies are listed on exchanges in Australia and Britain.

Rio Tinto has various mine investments including the Grasberg gold and copper mine in the Indonesia province of Papua and the non operational Bougainville mine.

Chinese steelmakers and the country's new government investment fund this week rejected reports that they were planning to team up to make a counter bid for Rio Tinto.