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China's Baosteel says likely to bid for Rio Tinto: report

by Staff Writers
London (AFP) Dec 4, 2007
China's largest steel producer Baosteel Group is likely to launch a bid for global mining giant Rio Tinto, already the target of BHP Billiton, Chinese press reports said Tuesday.

Rio Tinto has rebuffed BHP Billiton's proposal to merge, which would combine the world's third-biggest and biggest miners respectively to create a 350-billion-dollar (240-billion-euro) behemoth, saying it did not reflect the group's real value.

"We are considering it and the chance of putting forward a bid is very high," the 21st Century Business Herald said, citing Xu Lejiang, chairman of Baosteel.

Xu told the newspaper that the bid plan was still under study and the company had not signed any agreement with Rio.

Meng Haibiao, a Baosteel spokesman, said he was unaware of the plan and declined to comment on the chairman's remarks when contacted by AFP.

Rio Tinto reiterated that it had little to say when contacted in London for a reaction to the Chinese press report.

"There are a lot of speculative stories and we never comment on market rumours and speculation," a Rio Tinto spokesman said.

"We obviously couldn't comment on whether they will or won't do something, so we have no comment."

China is one of the largest buyers of Australian iron ore and previous reports have suggested Beijing might want to thwart BHP Billiton in its bid for Rio Tinto so as to ensure that the market is not even more tightly controlled by one giant company.

In the past, Beijing has complained that the world's three main iron ore suppliers -- BHP Billiton, Rio Tinto and CVRD of Brazil -- have raised the price as they saw fit, without due regard to their customers.

Last week Rio Tinto insisted it was poised for exceptional growth and denied receiving a counter approach from Chinese investors.

An unsourced report in weekly newspaper China Business had said then 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, stressed it was not involved with a Chinese consortium that was reportedly preparing a 200-billion-dollar offer.

BHP's offer of three shares for each Rio Tinto share currently values Rio Tinto at about 124 billion dollars.

In late afternoon trade, Rio Tinto was up 0.85 percent at 5,489 pence in London where the main index was down 1.06 percent.

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Nine killed in China mine blast: report
Beijing (AFP) Dec 3, 2007
Nine miners were killed and six injured after an explosion Sunday at a private coal mine in southwest China's Yunnan province, state media reported late Sunday.

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