China may gatecrash BHP bid for Rio -report

BEIJING, Nov 26 (Reuters) - China Investment Corp, the country's new sovereign wealth fund, is considering teaming up with major steel producers to offer about $200 billion for Rio Tinto Ltd/Plc (RIO.L: Quote, Profile, Research, Stock Buzz), according to a weekly newspaper.

Rio has rejected an all-share offer from rival miner BHP Billiton Ltd (BHP.AX: Quote, Profile, Research, Stock Buzz). It will outline its defence in London later on Monday.

"The plan now is for Chinese steel makers and CIC to jointly set up a team to join the bidding for Rio," the China Business newspaper reported, citing an unidentified source.

CIC, established in September to manage $200 billion of China's $1.43 trillion in foreign exchange reserves, would link up with steel makers including Baoshan Iron and Steel Co (Baosteel) (600019.SS: Quote, Profile, Research, Stock Buzz), the paper said.

Baosteel and other Chinese steel makers told BHP Chief Executive Marius Kloppers last week they were worried that a combination of BHP and Rio would have too much power in setting the price of iron ore, the main feedstock for steel. (Reporting by Zhou Xin, editing by Ken Wills)