Mittal unlikely to buy Rio stake soon

By Mathieu Robbins and Eric Onstad

LONDON (Reuters) - Steel magnate Lakshmi Mittal considered buying a stake in bid target Rio Tinto (RIO.L) to expand his interests in iron ore but has decided against it for now, sources familiar with the matter said on Monday.

The sources told Reuters that Mittal, the main shareholder in the world's biggest steelmaker ArcelorMittal (ISPA.AS), decided several months ago not to buy a holding in miner Rio (RIO.AX), which is resisting a takeover bid from rival BHP Billiton (BLT.L).

Mittal, also chairman and chief executive of ArcelorMittal, has not completely ruled out a future purchase, but it would be extremely unlikely in the short term while BHP seeks competition approval for the all-share takeover, they added.

ArcelorMittal declined to comment.

The news comes after the Financial Times reported on Monday, quoting people familiar with the situation, that Mittal is considering entering the Rio Tinto takeover battle.

"Mr. Mittal has considered some involvement in the takeover, such as the idea of taking a stake in Rio through buying from existing shareholders," it quoted an unnamed banker as saying.

"On the other hand, he could wait until later, when quite possibly some of the iron ore assets (of Rio) go on sale as a result of demands by antitrust regulators," the FT quoted an unnamed banker as saying.

Steelmakers across the world have vowed to oppose the marriage of Rio and BHP, which would combine the world's second- and third-biggest producers of iron ore.