Rio Tinto chairman Paul Skinner, who has put in six years in the company, currently in the middle of a hostile takeover from bigger rival BHP Billiton, is leaving his position when his term ends in late 2009 and is rumoured to be taking up the top job at the oil giant British Petroleum, present chairman Peter Sutherland steps down next year.

Rio Tinto said in a curt statement, "Having served six years as chairman and made a significant contribution to the company, Skinner does not intend to seek a further term," indicatingt that Skinner's decision has not gone down well with the board, which feels he is abandoning ship when it needs him the most, in keeping at bay BHP and an expected forecasting a slowdown in the iron ore market.

In the meanwhile Rio Tinto said that the company's board has started the process of  identifying Skinner's successor, who according to experts will be an insider as he will be more familiar with the workings of the company.

Although BP's board has not yet approved Skinner's appointment, his exhaustive experience of 40 years in Shell will make him the frontrunner to head the company.

Skinner worked at Shell in the UK, Greece, Nigeria, New Zealand, and Norway and was managing director of Royal Dutch-Shell Group as well as Shell Transport and Trading Company. He was also the CEO of Shell's global oil products business.

Skinner became a director and board member of Rio Tinto in 2001 and subsequently its chairman in 2003.

Paul Skinner has indicated that he would like to resolve the merger issue before the expiry of his term.

The world's largest miner BHP Billiton has been ardently pursuing its immediat rival, the second-ranked Rio Tinto, the world's second-biggest iron ore supplier, before turning hostile with an all-stock offer of 3.4 BHP shares for each of Rio Tinto's, valuing the offer at $165 billion.

However, today with BHP's stocks have nose dived in keeping with the global trend in the aftermath of the credit crisis and economic slowdown, the deal size has shrunk less than half at approximately $70 billion. Although Rio has repeatedly spurned BHP for undervaluing it, whether BHP abandons the bid or continues to pursue it, remains to be seen.

If the acquisition goes through, then a merged BHP Billiton-Rio Tinto entity would control more than a third of the world's iron ore mining, which has spurred many countries and steel companies to voice their alarm over the monopoly that this merger would create (See: China calls for Europe to reject BHP Billiton - Rio Tinto merger) 

In a new twist to the merger, the Japan, which import 60 per cent of iron ore for its steel production has now asked the European Union's antitrust regulators to block the proposed merger saying that any merger will create anticompetitive pricing.

EU regulators are supposed to give its ruling in the middle of next year.