pe ratio to reduce share price 50 percent, page-9

RIO have most of their eggs in one basket which is iron ore, my point being most of their upside is in iron ore.

Rios star asset is iron ore which means that they are not diversified. A true diversified miner has a mix of very large projects, RIO one very large iron ore project and several small projects.
BHP is after only one thing. the iron ore.
If RIO was diversified BHP would be trying a lot harder, at this point BHP can take or leave RIO because it will suffer from an economic slowdown and doesnt have the earnings to justify a share price over $70.
Established miner is judged by earnings.

Rio has several problems,
1 That is projects are not large enough to call it a diversified miner, in the event of slowdown this means that losses in some projects will not be absorbed as easily.

2 That they dont have the workforce to increase iron ore output so there will be a large lag time while iron ore is at peak pricing.

3 There current share price is driven by bhp takeover and in the event of extra earnings it will still remain the same as the current level. It will need to double the production to justify the current share price.
A good example is SMM which was taken over by PDN, SMM share price was $6 in the takeover and now its $1.90.

Rio has no special powers to protect its share price, vodo, there are not holy ghosts, angels or praying that will stop it from falling. You can scream rant and rave on hot copper but Rio like every other share, will fall when a takeover fails and the counter offer might not be as good.