November 21, 2008

BHPB bid for Rio – Chinalco stake bolsters BHP rejection

It is reported that the recent purchase by Chinese aluminum group Chinalco of a stake in world No 2 miner Rio Tinto adds fire power to Rio's rejection of BHP Billiton's hostile takeover bid.

Mr Tom Albanese CEO of Rio told reporters in Toronto after a speech to a mining conference last month that "I see this as a strategic investment that Chinalco have made and it reinforces the value message that we have been saying from the beginning.”

Mr Albanese on the sidelines of the Prospectors and Developers Association of Canada convention said that "Chinalco's investment in Rio Tinto was unsolicited and unexpected and they don't seek the influence of management, they don't seek to put a person on the board.”

Chinese aluminum group Chinalco and US firm Alcoa Inc surprised markets by taking a 12% for USD 14 billion stake in Rio Tinto. Chinalco's chairman has said his company has no plans at this stage to increase its stake beyond that.