Rio defends its rebuff of BHP to its shareholders

SYDNEY, April 24 (Reuters) - Rio Tinto Ltd/Plc (RIO.AX: Quote, Profile, Research, Stock Buzz)(RIO.L: Quote, Profile, Research, Stock Buzz), fighting one of the biggest corporate takeover battles ever with unwanted suitor BHP Billiton Ltd/Plc, reiterated on Thursday it was better off riding China's commodities boom alone.

Top Rio and BHP executives have staged a war of words as BHP lobbies its case for a tie-up with Rio shareholders and anti-trust agencies worldwide, a process it says will take until at least December.

Rio's board has rejected BHP's offer of 3.4 of its shares for every Rio share, worth $147 billion when it was pitched in February, as "out of the ballpark", given pricing for industrial commodities such as copper, iron ore and coal has never been higher thanks to China's hunger for imported raw materials.

Without giving a price, Rio Chairman Paul Skinner told a shareholder meeting in Brisbane that any fresh offer would need to reflect a "significant premium to what we can achieve ourselves".

"So far we have not seen that," Skinner told the annual general meeting of Australian shareholders. "In the meantime the momentum in our business continues to develop strongly."

If BHP succeeds, it would mark the second largst corporate takeover after Vodaphone's $203 billion acquisition of Mannesman.

Skinner said there was a false impression in the mining sector that the U.S. financial crisis was hurting producers.

"This is not how we see it," he said. "Last year China consumed more than half the world's iron ore imports, and its total steel consumption was over three times that of the U.S."

BHP Chief Executive Marius Kloppers attacked Rio's performance claims in an interview with the Financial Times this week, saying Rio's chief executive, Tom Albanese, had "missed the boat" on China and the dizzying surge in oil prices.