Mining majors may bid for Australia's Alumina Ltd

Australia's Alumina Ltd. (AWC.AU) is again the subject of takeover talk as speculation resurfaces that one of the mining majors could make a bid for it and joint venture partner Alcoa Inc. (AA).

Mining analysts have long tipped cashed up mining heavyweights BHP Billiton Ltd. (BHP.AU) or Rio Tinto Ltd. (RIO.AU) as potential bidders for the joint venture but Alcoa's significant downstream business is seen as being of little interest.

Alcoa's announcement that it is looking at divesting some of that downstream business has sparked fresh talk the miners may look at a bid for Alcoa and Alumina.

"It would certainly make the stock more attractive to BHP and Rio," Fat Prophets analyst Gavin Wendt said.

"If you want to grow in the aluminium industry and you have got the cash, which both of those companies do, then Alcoa would be the acquisition of choice."

Wendt said Rio might be more likely to make a bid for Alcoa and Alumina as part of a move to reduce its reliance its copper and iron ore divisions.

Alumina is trading up as much as 1.5% in early trade Friday morning in a generally weaker market.