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Rio CEO: Miner's Position Strong In 'Metal Hungry' Market

Mining company plans to boost annual iron ore output to 600 million metric tons and committed $2.4 billion to develop iron ore deposits.

MELBOURNE, Australia (AP) β€” Rio Tinto Ltd. outlined a conceptual plan to boost annual iron ore output to 600 million metric tons and committed $2.4 billion to develop iron ore deposits Monday, ahead of an investor briefing in London.
 
Rio Tinto is laying out new justifications for rejecting a $150 billion takeover bid from rival BHP Billiton Ltd. that would create global mining behemoth.
 
Chief Executive Tom Albanese said the full value of the company's assets was yet to be reflected in the market.
 
''We believe we have a better growth pipeline than our competitors, which puts Rio Tinto in a strong position to supply the metal-hungry world,'' he said in the statement. ''We have the people, execution capability and resources to work smarter, faster and better than our competitors.''
 
The statement was posted on Rio Tinto's web site ahead the investor briefing in London by Albanese and other top executives. Rio Tinto is based in Britain, and is listed on stock exchanges in London and Australia.
 
BHP Billiton, the world's biggest mining company whose stock is listed in Sydney and London, proposed in a 101 billion euro, all-share deal to buy Rio Tinto.
 
Senior BHP executives, including CEO Marius Kloppers recently toured Asia touting the proposed deal to existing and potential customers in China and elsewhere, many of whom are uneasy about a takeover that could lead to the eventual control more than one-third of the world's iron ore sales.
 
China, as the world's biggest steel producer and consumer, is a big customer of BHP and Rio Tinto, but has long chafed under relatively weak leverage in iron ore pricing.
 
Rio Tinto's statement came as Chinese steelmakers and the country's huge new government investment fund rejected a report by a Chinese magazine that they were planning to team up in a bid for the mining company.
 
''There is absolutely no such thing,'' a spokeswoman for China Investment Corp., Bai Xiaoqing, told Dow Jones Newswires.
 
Albanese told reporters in a morning conference call that the company is not seeking help to defeat the BHP Billiton proposal.
 
''We have not been engaged in discussions with anyone at this stage,'' he said.
 
The Beijing-based magazine China Business reported over the weekend that China Investment was planning to join Shanghai-based Baosteel Group, China's biggest steelmaker, and other steel companies in bidding $200 billion (135 billion euros) for Rio Tinto.
 
Rio Tinto and BHP Billiton shares both soared in Australian trading on Monday. Rio Tinto closed 7.8 percent higher than Friday's close at 135 Australian dollars, while BHP Billiton closed 4.57 percent higher at 42.11. Australian dollars
 
In addition to potential iron ore output increases, Rio Tinto committed billions to developing two iron ore deposits in the Pilbara region of Western Australia.
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