Rio chief advocates strong independent future

The chief executive of Rio Tinto, Tom Albanese, has described BHP Billiton’s hostile takeover bid for the group as “dead in the water”.

The three-for-one share offer from the world’s largest miner values Rio Tinto at around $130 billion and Mr Albanese has long argued that it seriously undervalues the company.

However, the bid has promted Rio to publicise its growth plans and reveal the possibility of a programme of disposals.

Overall, Mr Albanese is optimistic about the future and while acknowledging that the company’s fortunes are dependent upon global economic growth, sees Rio’s independent future as strong.

He is not convinced that the US will enter a recession and in any event believes that growth from Asia alone will keep up demand for base metals and other commodities.

Mr Albanese explains that: “the growth we’re seeing from China and India is increasingly going on with less and less influence from dynamics in the US … even in the event of a (US)recession, we predict it would only have a 1% effect on Chinese growth and that still could be up in the 10% range for 2008.

Earlier this week there were reports in the UK press that Blackstone, the US private equity firm, was working on a bid for Rio Tinto and that if successful, it would break up the group.