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Baosteel Group Denies Interest In Rio Tinto

China's biggest steel producer says it has no plans to bid for Rio Tinto, which is trying to fend off an acquisition offer from rival BHP Billiton Ltd.

SHANGHAI, China (AP) — Baosteel Group Corp., China's biggest steel producer, confirmed Friday it has no plans to bid for Rio Tinto PLC, which is trying to fend off an acquisition offer from rival BHP Billiton Ltd.
 
The denial came after 21st Century Business Herald on Monday cited Baosteel Chairman Xu Lejiang as saying the parent of Shanghai-listed Baoshan Iron & Steel Co. was considering a bid for Rio Tinto.
 
Baosteel's Web site posting Friday confirms comments reported Thursday that Chairman Xu had denied the Herald story, saying ''Baosteel lacks the financial wherewithal to take over Rio Tinto.''
 
London-based Rio Tinto, whose stock is listed in Sydney and London, has already rejected a takeover proposal from rival mining conglomerate BHP Billiton that is valued at more than $130 billion.
 
Rio Tinto Chief Executive Tom Albanese, visiting shareholders in the U.S., stepped up his rhetoric against the BHP Billiton proposal Thursday, labeling it ''dead in the water.''
 
Steelmakers in China, Japan and South Korea are worried that a combination of two of the world's largest miners into a single company would have too much control over the pricing and supply of iron ore. China, the world's biggest metals consumer, has been relying heavily on some minerals imports, including copper and iron ore, which it badly needs for its economic expansion.
 
Baosteel said in its statement Friday it believes the BHP Billiton bid will have a significant impact on the global steel industry and the nonferrous metals sector, and that it ''is closely watching, following and evaluating the development.''
 
The Australian Broadcasting Corp. radio Friday broadcast Baosteel's senior manager of strategy and planning, Fang Xiaodong, as saying ''the Australian government should take some anti-monopoly action to prevent the merger of BHP and Rio, or any other merger of this kind in the future.''
 
''This kind of behavior will damage free competition. If the Australian government takes a 'let it be' attitude it will impair the world's steel markets, which will eventually hurt Australia,'' Fang said on the radio.
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