Brazil Miner CVRD Declines Comment On Rio Tinto Rumors

Brazilian mining giant Companhia Vale do Rio Doce, or CVRD, declined to comment Wednesday on market speculation that the company was joining forces with BHP Billiton to buy rival miner Rio Tinto. "CVRD does not comment on rumors in the market," a spokeswoman in the company's press office told Dow Jones Newswires. Mining stocks surged in overseas trade Wednesday after Merrill Lynch increased its longterm commodity price forecasts and said that industry consolidation was setting a price floor. A trader then said speculation was circulating in markets that CVRD and BHP Billiton would team to buy Rio Tinto, then break the acquired company up. Another trader said the current volatility in global credit markets would make such a deal unlikely. "I can't see it happening as banks' appetites and abilities to lend must be severely constrained," the trader said.