Chinese steelmakers, the largest buyers of iron ore, and the government are studying a joint bid for Rio Tinto Group to counter a $134 billion offer from BHP Billiton Ltd.
“It’s an issue being discussed by top-level officials,” said Chen Hanyu, a director at the resources office of Beijing-based Shougang Corp., the nation’s ninth-largest steelmaker. Members of the China Iron and Steel Association have held talks, Vice Chairman Qi Xiangdong said in a telephone interview.
The steel mills want to block BHP’s offer because the deal would give the world’s biggest mining company control of almost half the Asian market for iron ore. Rio’s London shares are trading at a 14 percent premium to BHP’s all-share proposal, indicating investors expect a higher offer. Any acquisition by China would dwarf CNOOC Ltd.’s failed $18.5 billion bid for Unocal Corp., rejected by U.S. lawmakers in 2005.
China has been scouring the world for resources. Aluminum Corp. of China bought Peru Copper Inc. for $860 million in August.
