Rio Tinto has rejected BHP Billiton's US$147bn all-share pre-conditional offer on the grounds that it "undervalues" the mining company.
In a statement, Rio says it is not prepared to give up its valued assets and future growth prospects following the offer made yesterday.
"BHP Billiton's offers, while improved, still fail to recognise the underlying value of Rio Tinto's quality assets and prospects," says Rio Tinto Chairman Paul Skinner.
"Our plans are unchanged, and will remain so unless a proposal is made that fully reflects the value of Rio Tinto."
This is the second time Rio has rejected BHP's unsolicited take-over bid - in November 2007 the company rejected a US$140bn offer as too low.
Rio Tinto says it will now press ahead with its strategy of "operating and developing large-scale, long-life, low-cost assets to generate significant value for shareholders".
Rio's plans have been boosted after it today announced the discovery of three billion tonnes of additional iron ore resources at its base in the Pilbara, Western Australia.
The news follows the discovery of 875 million tonnes of iron ore at Caliwingina.
The company occupies the largest mineralisation and land position in Pilbara, one of the world's biggest iron ore producing regions.
By Ozge Ibrahim
