Gold News

Massive mining mergers in the mixer as metal prices soar

The world's biggest mining company could be set to take over gold miner Rio Tinto, despite having a proposal rejected earlier this month.

Australian mining giant BHP Billiton is said to be keen to capture Rio Tinto – which principally mines aluminium but also gold and other metals – with the prospect set to add to the year's list of high profile mining mergers.

Investors looking to buy gold and other metals have sent commodity prices soaring and have placed a new premium on mining shares and sector expansion, as was evidenced by Freeport's huge $26 billion acquisition of Phelps Dodge Corp earlier this year.

But for BHP Billiton to make its reported $128 billion takeover move, stern opposition from European Confederation of Iron and Steel Industries (Eurofer) will have to be overcome.

While Rio Tinto's gold assets would be a valuable string to BHP's bow, it is iron ore that worries Eurofer, with the confederation claiming that the proposed merger would create an even greater monopoly of the metal than is currently the case.

Meanwhile, other gold mining groups are also in transition, with US giant Newmont increasing its focus on the precious metal and currently carrying out a friendly takeover – valued at $1.5 billion - of Miramar Mining Corp.

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