Rio Tinto boss in fightback against BHP's takeover bid

Rio has rejected BHP's £62.4 billion three-for-one share offer on the grounds that it undervalues it and its prospects.

But when Albanese was asked today whether he was ruling out a sale at any price, he would only say he would "continue to focus on creating shareholder value".

BHP is widely expected to come up with a cash sweetener for the deal and Albanese is under pressure from some quarters to start talks.

However, the Rio Tinto boss indicated he is in no hurry to do so. "BHP may need Rio, but Rio does not necessarily need BHP," he said.

"Be in no doubt, BHP wants to access Rio's strong growth prospects." Albanese's defence of his company's underlying value came as reports in Beijing said that the recently formed China Investment Corp, a $200 billion (£96.9 billion) sovereign fund, is also preparing a bid for Rio.

CIC may join with a consortium of the country's giant steelmakers, according to the China Business Journal, which is published by a state-owned research group.

"The plan now is for Chinese steel makers and CIC to jointly set up a team to join the bidding for Rio," the paper said, citing insiders.

The Beijing authorities deny the report and Rio had no comment. The proposed merger between Rio Tinto and BHP would create a giant miner controlling about 38% of iron-ore exports, and has alarmed customers in China, Japan and Europe by the prospect of losing price bargaining power.

Albanese highlighted five drivers of growth for Rio - iron ore, copper and aluminium as well as a capital management programme that is returning cash to shareholders, and divestments that could now deliver as much as $30 billion.

He said the company will spend $2.4 billion on two new iron ore mines in Australia and shoulder more than half the cost of a diamond mine expansion in Canada which will cost over half a billion dollars.

Albanese is also targeting at least $15 billion from asset sales following the company's acquisition of Alcan this year, up from a previous target of $10 billion, and said that the figure could rise to $30 billion.

Rio announced that it would increase this year's total dividend by 30%, with a further annual total increase of no less than 20% in the next two years.

"We believe that the value in Rio Tinto is yet to be fully reflected by the market, Albanese said, adding that Rio had "a better growth pipeline than our competitors".

Many analysts believe there is considerable logic in putting the two companies together.

"I am concerned that large shareholders of BHP and Rio are being too passive in this merger debate. If you own both BHP and Rio you should be actively pushing Rio to the negotiating table," Charlie Aitken from Southern Cross Equities said in a recent note.

He said the deal would "ensure that both Rio and BHP shareholders prosper more from the cycle ahead than they would have individually".

But many investors are voting with their feet.

Some £13 billion has been wiped off Melbourne-based BHP's market value in two weeks.