LONDON (AFP) — Rio Tinto, the target of a takeover proposal from mining rival BHP Billiton, said Monday it was poised for exceptional growth and denied receiving a counter approach from Chinese investors.
Anglo-Australian group Rio said it expected to triple its iron ore output as it presented its case against a proposal from BHP, the world's biggest miner, to create a 350-billion-US-dollar (236-billion-euro) behemoth.
Rio also denied an unsourced report in weekly newspaper, China Business, that China Investment was leading a group of Chinese steelmakers in a bid for Rio Tinto.
China Investment Corp, a sovereign fund set up to invest part of the nation's foreign exchange reserves, itself stressed it was not involved with a Chinese consortium that is reportedly preparing a 200-billion-US-dollar offer.
Talk of a rumoured bid sent Rio Tinto's share price soaring more than 7.0 percent at the close in Sydney. In London, where Rio is also listed, the group's share price was up 1.66 percent to 5,403 pence around 1300 GMT.
BHP Billiton won 0.13 percent to 1,570 pence.
In a statement released Monday, Rio Tinto's chief executive Tom Albanese said his group's value had yet to be fully reflected.
"The rise in global mineral demand is a trend that we expect to continue for decades because of fundamental demographic and economic shifts, especially in developing economies like China and India," he said.
Rio recently rejected BHP's three-for-one share swap offer, saying it undervalued the company. It has twice refused requests from BHP for talks.
The prospect of a merger is said to concern China, whose steelmakers fear that a combined company would have too much power over iron ore pricing. A merged firm would account for almost 40 percent of China's iron ore imports.
According to the China Business paper, a Chinese consortium interested in buying Rio would also include China's biggest steelmaker, Baosteel, and other firms controlled by the central government.
But a spokesman for the sovereign wealth fund, China Investment Corp., denied it had taken part in a bid.
"China Investment Corporation has not taken part in any related bid for Rio Tinto, and later tonight we will issue a formal denial," the spokesman, Wang Jianxi, told AFP.
In London, Rio Tinto chairman Paul Skinner told BBC that the company had received no new proposal.
"All I can say is that we haven't had such an approach from Chinese investors," he told BBC radio.
In its defence to BHP's offer, Rio argued it had a better growth pipeline than its competitors, saying it was the globe's leading aluminium and bauxite producer.
"We have the people, execution capability and resources to work smarter, faster and better than our competitors," said Rio chief executive Albanese.
BHP Billiton's chief executive Marius Kloppers has been attempting to sell the merger to global investors, but opposition has begun to emerge from Europe and Asia.
The China Iron Steel Association has criticised it as a move towards a global "monopoly" in the iron ore trade that would disadvantage buyers.
The Brussels-based International Iron and Steel Institute, which represents 180 steel producers, has warned the merger was not in the public interest and would create a monopoly.
The chairman of the Japan Iron and Steel Federation, Hajime Bada, has said the proposed merger was undesirable for competition and pricing reasons.
A combination of Rio and BHP Billiton would create the world's largest producer of coking coal, thermal coal, copper and aluminium.
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