UPDATE 4-Rio Tinto H2 profit up on record production

(Adds London presentation, updates shares)

By James Regan

SYDNEY, Feb 13 (Reuters) - Global miner Rio Tinto Ltd/Plc (RIO.AX: Quote, Profile, Research) (RIO.L: Quote, Profile, Research) posted a 9 percent rise in half-year underlying profit, boosted by record iron ore production, and again rebuffed a hostile takeover bid by rival BHP Billiton Ltd/Plc (BHP.AX: Quote, Profile, Research).

Rio said there was "clear water" between BHP's (BLT.L: Quote, Profile, Research) sweetened $147 billion bid and Rio's fair value.

"BHP Billiton's offer, while improved, still fails to recognise the underlying value of Rio Tinto's quality assets and prospects," Rio Chairman Paul Skinner told reporters, adding there had been no contact with BHP since an earlier proposal was tabled in November.

Full-year underlying earnings -- that strip out impairment charges, foreign exchange differences and one-off costs from last year's acquisition of Canadian aluminium producer Alcan -- nudged up 1 percent, just above analysts' expectations.

Rio has rejected BHP's offer of 3.4 of its shares for each Rio share as too cheap, stressing its own growth plans and the positive outlook for commodity markets.

Skinner said he was "flattered" by a $14 billion raid on 12 percent of Rio's London shares by Chinese aluminium group Chinalco and U.S. firm Alcoa Inc (AA.N: Quote, Profile, Research) this month, and dismissed suggestions the duo was arming for a counter offer.

Chinalco and Alcoa had quickly informed the Rio board they had no designs on taking a management role, but the two sides held open the possibility of collaboration.(See [ID:nL13113497])