China Development Bank denies rumours regarding Rio Tinto

by Richard Kilner

Story link: China Development Bank denies rumours regarding Rio Tinto

Yesterday the China Development Bank, a state policy lender, denied rumours it would be taking part in the purchase of a stake in the mining company Rio Tinto.

German daily Handelsblatt cited anonymous sources at the Chinese bank that it was planning to buy a stake in the mining firm on behalf of an unknown Chinese firm.

Handelsblatt claimed that no price had been set, but that the contract was expected to be signed imminently.

Another story in the Sunday Telegraph that the China Development Bank has a stake of under 1% in Rio Tinto has was earlier denied.

Last week rival firm BHP Billiton put in a bid of approximately US$150 billion for Rio Tinto, but was rejected. It has been suggested that Beijing could prevent any deal that was contrary to its own interests in the iron ore supplied by the two firms.

Almost half of all the iron ore used in the world is consumed by the Chinese, and the country could stand to lose a lot at the proposed deal as Anglo-Australian miners would acquire great negotiating power with importers over prices.

There has been a spate of expansion from Chinese mining firms of late as they seek to grow both their resource base and their share of the global market. China Shenhua Energy is the largest coal miner in China, and has recently been considering global investments, including Australia and Southeast Asia.