Ore deal shores up Rio's defence
Miner Rio Tinto today bolstered defences against takeover by rival BHP Billiton by sealing a near-doubling of iron-ore contract prices for the year.
Prices negotiated with the lead Chinese steelmaker are to increase by 80%-97%. BHP is usually first to seal a deal, with Rio following.
"Now the shoe's on the other foot, and maybe Rio is trying to show BHP who's boss in iron ore," said James Wilson, an analyst for DJ Carmichael & Co.
BHP is still in talks over pricing with Baosteel, China's largest steel producer. The increase is higher than the 71% and 65% settlements announced by Brazilian mining giant Vale earlier this year.
Some analysts say the rise will also increase Chinese interest in investing in western resources firms.
China's state-owned aluminum giant Chinalco this year teamed up with Alcoa to buy a $14 billion (£7.1 billion) stake in Rio. That was seen as a move to block the Rio-BHP deal.
