Rio Tinto, which has been resisting advances for a take over by the world's largest mining company, BHP Billiton, rejected the sweetened $147-billion offer (See: BHP Billiton raises offer for Rio Tinto to $147 billion).  Rio, which maintained that BHP's previous informal $130 billion bid undervalued the company, said the improved bid of $147 billion also failed to recognise the underlying value of its mining assets.

"BHP Billiton's offer, while improved, still fail to recognise the underlying value of Rio Tinto's quality assets and prospects. Our plans are unchanged, and will remain so unless a proposal is made that fully reflects the value of Rio Tinto. Accordingly we are forging ahead with our strategy of operating and developing large scale, long life, low-cost assets to generate significant value for shareholders," said Paul Skinner, chairman of Rio Tinto.

"Rio Tinto has an exceptional portfolio of assets and significant stand alone growth opportunities, particularly in iron ore, copper and aluminium. These assets and opportunities, combined with the company's strong track record for value delivery, project execution and successful exploration means Rio Tinto is very well positioned to take advantage of strong global markets and the growth in the resources industry, maximising value for shareholders," added Rio Tinto's chief executive officer Tom Albanese.

BHP had, however, warned Rio that it was not willing to sweeten its offer any further.

The Chinese acquisition of 9 per cent stake in a joint market raid with US metal giant Alcoa for $14 billion also moved Rio's valuation above $155 billion.

Chinalco's acquisition of 9 per cent Rio stake, at $60 a share, was at a 11 per cent premium to the all-share offer proposed by BHP.

Rio also is legally bound to reject an offer below what Chinalco would pay were it to make a formal take-over offer.

Chinalco has made it clear that it stands ready to block any new bid if and when it comes.

Despite rejecting the BHP's offer of 3.4 of its shares for every Rio stock, Rio said it is still open to a better offer.

The US-China alliance of Alcoa and Chinalco which last week denied the possibility of their making an offer for the whole of Rio Tinto, said they are "monitoring developments" following BHP's bid.

A combination of BHP Billiton and Rio Tinto would control nearly one-third of the world's iron-ore and China would not like that to happen.