A Report from Hong Kong-based Takungpao showed shares of BHP Billiton, the world's largest mining company, hit a new high on the Australian stock market. BHP reached a high of AUD 48.9 per share and closed at AUD 48.56, up 6.82%. Foreign media reported that BHP's stock was boosted by a rumor that Aluminum Corporation of China (Chinalco), parent of Aluminum Corporation of China Limited (Chalco, 601600) is seeking to buy into the global mining giant. Marius Kloppers, executive director of BHP Billiton, expressed in early May that Chinese investors will buy into the company. When asked if Chinalco would be the potential buyer, he declined to make further comments. In Feb 2008, Chinalco, together with its strategic partner Alcoa, made the highest foreign direct investment in BHP. With USD 14.05 bln, or HKD 109 bln, Chinalco bought 12% of Rio Tinto listed on the London Stock Exchange.
Recently, several Chinese enterprises bought or increased stakes in Australian mining companies. As BHP Billiton pursues acquisition of Rio Tinto, analysts are worried that raw material prices will increase further. BHP confirmed the merger with Rio Tinto, and expressed it was very confident about completing the acquisition. BHP proposed to conduct a share swap with Rio Tinto, in which three shares of BHP would replace one share of Rio Tinto. The proposal means the acquisition price of Rio Tinto would be 28% higher than its present price. After the merger, BHP is expected to repurchase USD 30 bln shares of the company.

Source: www.sohu.com

Date: 15 May 2008

CN01/SW/KM