SHANGHAI Baosteel Group is considering a bid for mining giant Rio Tinto, the 21st Century Business Herald reported on its web site late last night, citing Baosteel chairman Xu Lejiang.
"We are currently considering this and there’s a strong possibility of launching a bid," Mr Xu was quoted as saying. "We are still studying the plan and are discussing how to launch a bid."
But shares in Rio Tinto (ASX: RIO: quote) remained weak despite the report, suggesting investors were unconvinced by the report, particularly after a denial by another Chinese steel maker.
Rio shares were 2.1 per cent lower to $143.75 by late afternoon.
Meng Haibiao, a Baosteel spokesman, declined to comment on the report today.
In another report, the Reuters news agency said Chinese steelmaker Shougang had denied a Bloomberg report that quoted Chen Hanyu, an executive at the firm, as saying big Chinese steel firms were studying a bid for Rio Tinto.
Mr Chen’s boss Tan Yixin, general manager of China Shougang International Trade and Engineering Corp Mineral Import and Export Company, said he had been misquoted.
“Chen Hanyu is not authorised to speak to the press like that. Chen Hanyu has said he did not say these things to Bloomberg,” he said. “Shougang is not involved in and will not be involved in any joint bid for Rio Tinto group.
“The company is not aware of any joint bid among steelmakers in China for Rio.”
Baosteel Group is China’s largest steel producer by output capacity and is the parent of Shanghai-listed Baoshan Iron & Steel.
The China Iron & Steel Association said today it had no comment on speculation that that Chinese steelmakers, likely with the government’s backing, may be teaming up to launch a counter bid for Rio Tinto to secure the country’s long-term iron ore supply.
With Dow Jones Newswires
