BHP Billiton shares surge on report that Chinese companies seek a stake in the miner

The Australia-listed shares of BHP Billiton Ltd. hit an intraday trading record of 50 Australian dollars (US$46.74; euro30.21) amid further speculation about Chinese interest in a stake in the company.

Chines companies had pitched a partnership to an Australian investment fund with the aim of taking a 9 percent stake in the mining giant, according to The Australian newspaper. It did not name the fund or the Chinese companies.

A BHP Billiton spokeswoman, Samantha Evans, said the company had no comment on the report.

BHP shares closed 1.5 percent higher at A$48.70, after having gained more than 4 percent to touch A$50.

The newspaper report said the rumored deal would see the Chinese take 4.5 percent of BHP Billiton, while the remaining 4.5 percent would be split between the Australian fund and a global private equity investor.

It is just the latest of recent rumors of unnamed Chinese entities seeking to build a stake in the mining giant.

Any move by a Chinese company to take a stake in BHP Billiton would be a dramatic escalation in China's investment in the Australian mining sector. Aluminum Corp. of China bought a 9 percent stake in Rio Tinto in February, and Sinosteel Corp. in late April saw its bid worth US$1.3 billion approved by the Australian board of iron ore miner Midwest Corp. Ltd.

Some industry experts remain skeptical that a Chinese company will take a stake in BHP Billiton any time soon, citing concern about the pace of Chinese investments overseas, particularly in crucial sectors. A number of them say the Australian government has slowed the approval of Chinese investments through the Foreign Investment Review Board.

BHP Billiton Chief Executive Marius Kloppers said last week that he had "no doubt" that the Chinese would one day "show up on our register."

BHP Billiton is attempting a hostile takeover of Rio Tinto and is offering 3.4 of its own shares for each Rio Tinto share. That values Rio at more than US$175 billion. There has been recent speculation in London that BHP would soon raise its bid to 3.8 shares for each Rio share.

Both BHP and Rio are listed on the Sydney and London stock exchanges.

Rio's Australia shares rose 1.9 percent Friday to A$155.35.