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Steelmakers Refute Rio Tinto Reports

Chinese steelmakers and the country's huge new government investment fund rejected Monday reports saying they were planning to team up in a bid for mining giant Rio Tinto.
/ Source: The Associated Press

Chinese steelmakers and the country's huge new government investment fund rejected Monday reports saying they were planning to team up in a bid for mining giant Rio Tinto.

"There is absolutely no such thing," a spokeswoman for China Investment Corp., Bai Xiaoqing, told Dow Jones Newswires.

The Beijing-based magazine China Business reported over the weekend that China Investment was planning to join Shanghai-based Baosteel Group, China's largest steelmaker, and other steel companies in bidding $200 billion for Rio Tinto.

Rio Tinto has rejected a takeover bid by Melbourne, Australia-based BHP Billiton Ltd., the world's largest mining company, which offered around $150 billion in an all-share proposal.

China's steelmakers are among many worldwide that have objected to the takeover plan, charging that any combination of the two would have too much power over iron ore supply and pricing.

An official at Baosteel Group, who refused to give his name, denied any knowledge of plans for a takeover bid for Rio Tinto, as did officials at Anshan Steel Group, another major Chinese steelmaker.

"We don't have any information about that," said Wang Yan, a spokeswoman from China Iron and Steel Association.

BHP Billiton's CEO, Marius Kloppers, visited clients and government officials in China, Japan and South Korea last week, but there was little sign he made any headway in garnering support for the takeover bid.

China's establishment of a $200 billion investment fund, one of the world's richest investment agencies, has raised concern Beijing might use that buying power to buy up overseas companies in strategic areas such as oil, mining and telecommunications.

So far, the fund's only known investment is its $3 billion acquisition of a minority stake in the U.S. private equity fund Blackstone Group LP.