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%

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.

does anyone know what 3.58 BLT shares and $16.50 would mean as a RIO price.[from BLT RNS as poss price for t/o]?

3.58 x ~12.50=~44.50 + $16.50 does that make RIO's price about 50.00 a share

Is the 3.58 factor for a closing price published earlier and not a price from today(which i used)

Anyone shed some light please?

Alex

i have just banked my profit (again!) in RIO because there still seems to be considerable doubt as to whether or not a revised bid from BLT or the Chinese will even materialise, and if it does, whether that will justify the current market price of 4850/4900 ...... personally, I have my doubts, and that will lead to a major fallout, albeit that that may drag others into the ring.

Sorry cynic but didn't you buy rio @ 52.

yes, and took an absolute hammering for my pains and allowing pure greed to rule ..... bit several bullets and dumped them about 10 days ago, since which time i have acted far more prudently and profitably by trading in and out ... ditto with XTA

This looks like the BHP prospect of an offer is now over:
"Earlier today, Shining Prospect, a Singapore-based entity owned by China's Chinalco and US firm Alcoa, which has committed $1.2bn into the company by way of a convertible instrument, announced it has acquired about 12% of Rio Tinto's shares.

Chinalco and Alcoa confirmed that they do not currently intend to make an offer for Rio Tinto but said they reserve the right to do so.

No official figure was mentioned for the purchase price of the Rio Tinto stake but traders noted talk that the two companies paid 6,000p a share, well above last night's closing price."

Staggering jump today, glad I wasn't short!

Earlier today, Shining Prospect, a Singapore-based entity owned by China's Chinalco and US firm Alcoa, which has committed $1.2bn into the company by way of a convertible instrument, announced it has acquired about 12% of Rio Tinto's shares.

Chinalco and Alcoa confirmed that they do not currently intend to make an offer for Rio Tinto but said they reserve the right to do so.

No official figure was mentioned for the purchase price of the Rio Tinto stake but traders noted talk that the two companies paid 6,000p a share, well above last night's closing price.

BHP Billiton has until February 6th to formalise an offer for Rio Tinto, a deadline imposed by the UK Takeover Panel under the regulator's 'put up or shut-up' rule.

Analysts had believed that BHP Billiton would at least formalise its indicative 3-for-1 paper offer for Rio Tinto, which would have valued the world's third-largest miner at about $130bn.

The Australian newspaper had reported on Wednesday that BHP Billiton could afford to hike its share offer for Rio Tinto to 4.25-for-one, according to Rio Tinto advisor Macquarie Bank.


it would therefore make sense for anyone buying into RIO at this juncture to keep an eye on BLT price and multiply it by anything between 3 and 4.25 if only as an estimate of where a bid may be pitched

Jonathan Compton from BBC2 Working Lunch says that this investment by Shining Prospect is a blocking tactic to prevent BHP from taking control of RIO, with no intention at all of a counter bid for RIO. He says watch out; Big bounce, followed by a big fall.

he may be right or he may be wrong ...... if BLT come in with an eventual thumping bid (not necessarily the initial sighting one) of say 65, then SP will be hard pressed to block and/or RIO board will be hard pressed to counter

looks like lots of interesting reading about this over the w/e