China considers crashing BHP's partyArticle from: AAPFont size:...

China considers crashing BHP's partyArticle from: AAPFont size: Decrease Increase Email article: Email Print article: Print Submit comment: Submit comment November 26, 2007 02:13pm
CHINA Investment Corp is reportedly considering teaming up with major steel producers to counter-offer about $200 billion for Rio Tinto.

Rio Tinto has rejected an all-share offer from rival miner BHP Billiton worth about $US124 billion ($141.06 billion), based on BHP's share price, one of the priciest-ever takeover attempts.

Rio chief executive Tom Albanese has scheduled media conferences and investor briefings to outline Rio's defence against BHP later on Monday.

"The plan now is for Chinese steel makers and CIC to jointly set up a team to join the bidding for Rio," the China Business newspaper reported, citing an unidentified source.

CIC, established in September to manage $200 billion of China's $US1.43 trillion ($1.63 trillion) in foreign exchange reserves, would link up with steel makers including Baoshan Iron and Steel (Baosteel), the paper said.

Baosteel and other Chinese steel makers told BHP Chief Executive Marius Kloppers last week they were worried that a combination of BHP and Rio would have too much power in setting the price of iron ore, the main feedstock for steel.

China already takes half of all the iron ore that BHP mines.

BHP, Rio and Brazil's CVRD control about 70 per cent of the iron ore that China buys.