BHP takeover bid 'dead': Rio Tinto CEO

Albanese would not say whether shareholders indicated what would be an entertainable bid from Melbourne based BHP, the world's biggest miner, whose three-for-one share offer values Rio Tinto at around $US130 billion ($A148 billion).

"There's clear recognition (from Rio Tinto shareholders) that what we rejected was rejected on the basis of value - it came up well short," Albanese told Dow Jones Newswires in a phone interview on Thursday.

He wouldn't say whether or not he has had talks with BHP management since the bid was made public or what price might be acceptable to the Rio Tinto board.

"We believe that running the business and running it independently delivers far more value for shareholders than the BHP proposal," he said. "That's why we rejected the BHP proposal and that's why the BHP proposal is dead in the water."

London-based Rio Tinto has previously said it refused to enter into talks with rival BHP after the unsolicited bid, which would create a mining giant. Since the bid, the previously conservative Rio Tinto has dramatically stepped up it talk on future growth prospects.

Albanese said Rio Tinto doesn't expect the US to enter into recession and is predicting growth of about one per cent in 2008. Any slowdown in the US economy will be offset by continued surging demand from China and India and doesn't make teaming up with BHP, or anyone else, a more attractive option, said Albanese, who took over as chief executive from Leigh Clifford in May.

The company's fortunes are tied heavily to global economic growth, which has a major impact on demand for the raw materials, like iron ore and copper, that Rio Tinto produces. Even if the US does go into recession, growth from Asia will keep demand strong, Albanese said.

"We have seen some impacts from the slowdown in the (US) housing sector, but clearly the growth we're seeing from China and India is increasingly going on with less and less influence from dynamics in the US economy," he said.

"But even in the event of a (US) recession, we predict it would only have a one per cent effect on Chinese growth and that still could be up in the 10 per cent range for 2008."

Source:By Matt Chambers