UPDATE 1-Rio Tinto to sell 3-tranche dollar bonds-sources

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HONG KONG, June 24 (Reuters) - Mining group Rio Tinto (RIO.AX) (RIO.L) set guidance for a three-tranche dollar bond offering that it aims to price as early as Tuesday, two sources involved in the deal said.

The two sources said no size had been provided, but BNP Paribas credit analyst Brett Williams put the size of the offering at $3 billion in an email to clients on Tuesday.

Rio Tinto is seeking to sell a five-year tranche at around 240 basis points (bps) over Treasuries, and a 10-year tranche at around 250 bps over Treasuries, said one of the sources, who is not authorised to talk to the media about the sale.

The mining firm is also aiming to sell a 20-year tranche at 250-255 basis points over Treasuries, that source added.

Rio's bond sale comes at the same time as a dollar debt offering from India-focused mining group Vedanta Resources (VED.L), which set guidance for a two-tranche sale that it is also aiming to sell as early as Tuesday during U.S. hours. [ID:nHKG221365]

Vedanta, which is rated below investment grade, is aiming to raise up to $2 billion in its bond sale, an investor being briefed on the deal told Reuters on Monday. [ID:nHKG243147]

Rio Tinto is currently the target of an estimated $163 billion bid by BHP Billiton (BLT.L) (BHP.AX), the world's biggest mining group, though Rio has rejected the offer as too low. For chronology, double click [ID:nB445645]

Mining firms are benefiting from a boom in commodity prices. China's largest steel maker Baosteel (600019.SS) and Rio Tinto said on Monday they have agreed on a price increase for iron ore that would be the biggest hike in at least over a decade.

Baosteel agreed to pay up to 96.5 percent more for its iron ore under its term contract with Rio, higher than the 65-71 percent that Chinese mills and Brazilian miner Vale (VALE5.SA) clinched earlier this year. [ID:nSP71377]

Rio Tinto is rated A3 by Moody's, or six notches below the top investment grade, and BBB-plus by Standard & Poor's, seven notches below the top rating.

Deutsche Bank (DBKGn.DE), JPMorgan (JPM.N) and Morgan Stanley (MS.N) are handling Rio's bond sale, the sources said. (Reporting by Rafael Nam; Editing by Keiron Henderson)