BEIJING, Nov 26 (Reuters) - China Investment Corp, the country’s new sovereign wealth fund, is considering teaming up with major steel producers to offer about $200 billion for Rio Tinto Ltd/Plc (RIO.L), according to a weekly newspaper.
Rio has rejected an all-share offer from rival miner BHP Billiton Ltd (BHP.AX). It will outline its defence in London later on Monday.
“The plan now is for Chinese steel makers and CIC to jointly set up a team to join the bidding for Rio,” the China Business newspaper reported, citing an unidentified source.
CIC, established in September to manage $200 billion of China’s $1.43 trillion in foreign exchange reserves, would link up with steel makers including Baoshan Iron and Steel Co (Baosteel) (600019.SS), the paper said.
Baosteel and other Chinese steel makers told BHP Chief Executive Marius Kloppers last week they were worried that a combination of BHP and Rio would have too much power in setting the price of iron ore, the main feedstock for steel. (Reporting by Zhou Xin, editing by Ken Wills)