Rio said it asked Britain's Takeover Panel to set a deadline under a "put up or shut up" rule by which BHP would have to formalize its approach, more than a month after BHP's US$140 billion (HK$1.09 trillion) 3-for-1 share proposal was made public.

In China, trading in the country's biggest steelmaker Baosteel was suspended yesterday amid speculation that mainland companies could become involved in a bid for Rio. Baoshan Iron and Steel has previously denied it was preparing a counterbid.

ADVERTISEMENT

"The [BHP] proposal is getting a bit stale," said James Wilson, a mining analyst with DJ Carmichael in Perth. "A marriage between Rio and BHP is the logical next step, and Rio is saying `come on BHP, get on with it, stop dilly-dallying'."

The proposal has eclipsed Rio's US$38 billion acquisition of Canadian aluminum giant Alcan, prompted widespread speculation of looming counterbids and triggered protests from the world's steelmakers fearing a combined group would have too much clout in setting raw materials prices.

A combined BHP-Rio would hold about 27 percent of the world market for iron ore. It would also control the global flow of coal, copper, uranium and diamonds. Rio has rejected BHP's overture, which it received in the form of letter, as "out of the ballpark," and has declined to meet BHP face-to-face to discuss a merger.

"All we can say at this stage is that we remain committed to what we believe is a logical and compelling proposal and we would like Rio Tinto to engage with us," a BHP spokeswoman said.

Rio chief executive Tom Albanese last week called BHP's proposal "dead in the water," and said other firms were calling, though Rio had not been responsive. UBS has said BHP could afford to put another US$27 billion in cash into the offer on top of a promised US$30 billion share buyback.

"This is a clear signal that Rio wants BHP to act on a bid and is hoping it will be bigger than the one out there now," an analyst said. REUTERS