Chinese firms looking to build stake in BHP

SYDNEY, June 11 (Reuters) - Chinese steel companies are looking to join forces to take a significant stake in miner BHP Billiton Ltd/Plc (ASX: BHP.ax) BLT.L, the Sydney Morning Herald newspaper reported on Wednesday. The paper quoted an official connected with the China Iron & Steel Association as saying that Baosteel 600019.SS, Wugang and Angang 0347.HK 000898.SZ hoped to come together to invest in BHP, in a deal likely to be financed by the China Development Bank. "Organising this is not easy," the official added. China Development Bank funded a purchase in March by aluminium producer Chinalco of a 9 percent stake in Rio Tinto Ltd/Plc (ASX: RIO.ax) RIO.L, subject of a $170 billion takeover bid from BHP. Chinese steel companies are concerned that if a merger between Rio and BHP did go ahead it would further entrench the stranglehold the two have on the global iron ore market. Industry sources said on Tuesday that Chinese small steelmakers would accept a 95 percent price hike in annual iron ore prices by Rio Tinto, though the bigger firms are seen holding out for a better deal. Source: Reuters