Rio Tinto is a world leader in finding, mining and processing the earths mineral resources. The Groups worldwide operations supply essential minerals and metals that help to meet global needs and contribute to improvements in living standards. Rio Tinto encourages strong local identities and has a devolved management philosophy, entrusting responsibility with accountability to the workplace. Major products include aluminium, copper, diamonds, energy products (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc and zircon), and iron ore. The Groups activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa. Rio Tinto comprises wholly owned subsidiaries (such as Borax, Comalco, Hamersley, Rio Tinto Coal Australia, Kennecott and Rio Tinto Iron & Titanium), partly owned subsidiaries (Coal & Allied and Palabora) and non-managed, (Escondida) and joint ventures (Grasberg) in which public shareholders, other companies or governments are partners.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 31/12/2005)

Iron:        29%
Coal:       19%
Copper     18%
Aluminum: 14.5%
Minerals:  12.5%
:              6%
Misc:        1%

Takeover Panel has told BHP to put up an offer this week or to bugger off ...... interesting and possibly quite scary times ahead, at least in the very short term ..... big Q is whether another bidder will put his head over the parapet if BHP walks out

Not sure there is anyone else who can raise the dosh. Plus I don't think BLT would be very happy to see someone else become a joint partner in the world's biggest mining company. To be fair to BLT, they have made a couple of offers now, which have been rejected by RIO, but in theory they could continue to make offers well in to 2008. The main sticking point seems to be valuation of RIO, as BLT don't seem to have any problem raising the cash. Tricky one to call, imo.

the chinese might well be very interested .... but that is pure hypothesis .... we shall just have to wait and see

From AFX today/yesterday:

BHP Billiton/Rio Tinto merger threatened by Takeover Panel deadline - reportAFX
LONDON (Thomson Financial) - BHP Billiton PLC's proposed 162 bln stg merger with rival mining group Rio Tinto PLC is in danger of being derailed this week as the Takeover Panel looks set to impose a deadline on a formal offer from the world's largest miner, said The Mail on Sunday. The intervention of the Panel comes at the request of Rio's management, which has lost patience with BHP Billiton after it failed to come up with a concrete takeover bid after weeks of informal overtures.

Rio chief executive Tom Albanese has already said that a tentative all share merger proposal from BHP 'seriously undervalues' his company's growth prospects.A 'put up or shut up' ultimatum from the Takeover Panel would mean BHP either walking away from what would be one of the largest takeovers ever seen or mounting a hostile assault, which would be much more complicated and would therefore stand less chance of success. A hostile approach, which BHP has been at great pains to avoid, would mean the company could not structure the deal as a simple scheme of arrangement as this would require a recommendation from Rio's board. Instead of simply merging the shares of both companies' shareholders, BHP would have to make a formal offer to Rio's shareholders in Britain and Australia as Rio is in both countries.

RIO is on the rampage today - currently +103 - though i fear it is no more exciting than some bears taking their profits as volume is pretty unexciting ..... unless there still some large hidden/incomplete orders still to be recorded

following worth reading, especially in conjunction with BRR thread .....

Lehman Brothers raised its 2008 earnings estimate for Rio Tinto by 3 pct, or 641 mln usd, following the company's plan to sell as much as 15 mln tonnes of iron ore in the spot market next year.

Rio Tinto said yesterday it plans to take advantage of the 'huge' gap between spot prices and the lower prices received under long-term contracts.

The world's third-largest mining company normally sells most of its iron ore production under long-term contracts, although it sold about 1 mln tonnes of iron ore this month on the spot market for about 190 usd a tonne. The broker estimates the delivered cost of similar quality ore from Australia, assuming a contract ore price and spot freight rate, is 86 usd a tonne.

Annual price negotiations between major suppliers, including BHP Billiton, Rio Tinto and Brazil's Vale, are under way. Lehman Brothers expects a 50 pct increase in iron ore prices, above the consensus of 35 pct, although it noted that even this figure may be conservative.

'We expect Rio Tinto to be more aggressive than usual in iron ore contract price negotiations for 2008 as a higher-than-expected iron ore price increase is likely to increase the standalone value of Rio Tinto and increase the price that BHP Billiton would have to pay to acquire Rio,' it said in a research note.

Rio Tinto has announced a number of major investments in projects and stressed its organic growth potential since receiving an unsolicited takeover approach from BHP Billiton last month.

Lehman expects Rio Tinto to post 2008 EBITDA of 21.09 bln usd after the broker factored in the spot market iron ore sales for next year. Lehman's forecasts does not factor in any possible spot market sales after 2008.

'We recommend that investors buy shares of Rio Tinto at current levels as we expect iron ore contract prices to significantly exceed the market's expectations,' it said in a research note.

The 15 mln tonnes Rio Tinto hopes to sell is equivalent to about 10 pct of its iron ore production.

The only thing is, that the RIO share price would be trading around the 4800p level had it not been for the BLT takeover approach. The spike from 4400p to 5600p was mainly due to that factor, so would it not be reasonable to assume that RIO is currently a littler overvalued? The potential is very encouraging though, as you say.

Something strange is going on with the price at rio to buy 55 to sell 49.20 @10:12

Just been looking round at other shares and the same thing just happerned share price dropped and then back up again.

have decided to be prudent and top-sliced ..... while a bid remains odds on, it may well not happen before the imposed deadline of early february

A touch risky to buy just on M & A rumour. Still, RIO is pretty solid as a long term defensive stock, imo. Though I know that's not your strategy, cynic.

see chart on post 16 ..... sp now nestling on 50 dma and unless the market tumbles again, there must be a good chance of a bounce from here ..... sp was whacked on friday, but much of that may have been profit taking precipitated by US dire performance .... general concensus is that BHP will not walk away, and the re must also be a reasonable chance that the chinese or another of the big miners will wade in .....

for myself i bought too high, but earlier made (banked!) a good turn on another tranche i bought cheaper, and indeed bought a tranche late friday at 5203 ..... i think it's a fairly good bet (i would wouldn't i!), and if i cannot make a quick(ish) turn, shall be reasonably happy to keep holding while the t/o story unfolds

Hard to say whether RIO will go up or down from here in the next few days. I believe BLT have said they're not improving their offer (in the short term that is, though no doubt part of the bargaining game). So maybe sp will drop a bit before it picks up again?

even if opening formal bid stays the same, i think that is still appreciably higher than RIO's current price, albeit that it will depend on the value of BHP's own paper.

LONDON (Thomson Financial) - "Rio Tinto and Xstrata PLC are both taking legal action over Argentina's plan to introduce new export duties on mining companies and other mining corporations may follow their example.

In December, Argentina announced the elimination of a tax exemption for mining exports in a move that could reduce the profitability of mining operations as well as threaten foreign investment in the country. Under the plan, companies may face export duties of between 5 and 10 pct.

A spokesman for Rio Tinto said Rio Tinto Minerals Argentina, formerly Borax Argentina, is one of the companies taking legal action.

'It is creating an environment of uncertainty for the mining sector and we require predictable legal and fiscal conditions under which to operate,' the spokesman said.

Rio Tinto Minerals produced 15,000 tonnes of borates -- used in fiberglass, glass, ceramics, and many other products -- in 2006.

Claire Divver, a spokeswoman for Xstrata, said: 'We continue to be hopeful that we will reach a solution through dialogue with the government to respect legislation currently in effect, but, in the meantime, it has been necessary for us to protect our short-term interests and we have commenced legal proceedings to protect our rights.'"

apparently following in FT .... Rio Tinto (rumours of an increased offer from BHP Billiton)

anyone got the full comment to post?

bought into XTA at a good price this morning (phew!) and am now undedcided whether or not RIO is worth a flutter at current level (4490), even if still perhaps 3.00 or even 4.00 above BHT's opening offer

RIO should drop to the 200 DMA, imo, which would be about 4200.
XTA certainly seems a better bet at the moment. But both of these are M&A driven at present, so DMAs may not be the best guide.

you are right that they are not, but at least they give some sort of support logic

Beware of what might happen today; this is the news from Australia, via AFX:

"Index leader BHP Billiton shed 2.29 dollars or 6.7 percent to 31.00 dollars and takeover target Rio Tinto dropped 13.25 dollars or 11.6 percent to 101.00 dollars."

An 11% drop here would certainly take it well below the 4200 level.