CORRECTED - CORRECTED-UPDATE 2-BHP pitches $30 bln buyback; Rio unmoved

(Corrects paragraph 16 to show source saying Rio, not BHP, may be open to a bid.

By James Regan and Michael Smith

SYDNEY, Nov 12 (Reuters) - BHP Billiton Ltd/Plc (BHP.AX) on Monday mapped out its plan for acquiring rival Rio Tinto Ltd/Plc (RIO.AX), promising to hand shareholders $30 billion via a share buyback if the deal goes through, in the hope of drawing Rio's board into talks.

BHP (BLT.L) has so far been unable to persuade Rio's board to discuss its $140 billion all-scrip takeover proposal aimed at assembling a mega force in mining of everything from iron ore and manganese to copper and diamonds.

"BHP Billiton now considers it appropriate to make BHP Billiton and Rio Tinto shareholders aware of its proposal so it can seek their support for discussions between the two companies," BHP said in a statement.

A Rio spokesman said there was nothing new in the BHP release, and BHP's proposal, already rejected by Rio's board as too low, remained "well out of the ballpark".

BHP outlined $3.7 billion in savings in the seven years after a merger via synergies in iron ore, coal and other activities.

The savings would occur mostly through higher production runs and efficiencies of scale and help insulate against cyclical down swings in commodities markets, BHP said.

The one-time "Big Australian", which now operates in 25 countries, also attempted to defuse concerns that a bid would run foul of anti-trust regulators, particularly in iron ore, where it would hold 27 percent of the world market.

It said it saw "no significant barriers", although it would probably take 9-12 months to gain the necessary approvals.

The world's biggest mining house also vowed to maintain a progressive dividend policy post-merger, leaving Rio shareholders with 41 percent of the company.

Newly-installed BHP Chief Executive Marius Kloppers may take the unusual step of contacting Rio's big shareholders personally in the hope of selling the merits of the 3-for-1 offer and forcing fresh talks with the Rio board, a source close to the proposal told Reuters.

Rio Tinto shares jumped 10.4 percent to A$144.50 in Sydney on Monday, building on a 15.4 percent rise on Friday after BHP confirmed its approach. BHP was flat at A$42.47.

Analysts are divided on whether Rio's board is looking for a cash-or-scrip-sweetened alternative proposal from BHP, or is simply aiming to keep BHP at bay altogether.

But BHP has already dispatched advisers Citigroup (C.N) and Goldman Sachs (GS.N) to arrange $70 billion in debt refinancing to help pay for a takeover.

Klopper's pitch could be easier given that 60 percent of Rio Tinto shareholders reportedly hold BHP stock.