Rio Tinto's chief waits for richer BHP offer

By James Regan

SYDNEY (Reuters) - With his formal training in geology, Tom Albanese could be excused for believing he'd struck the mother lode after orchestrating a bump-free $38 billion acquisition of Alcan just six months into his new job as chief executive of Rio Tinto, the world's second-largest mining house.

That was before bigger rival BHP Billiton said it wanted to buy Rio to assemble a super miner in what could be the second-costliest corporate takeover in history after telephone group Vodafone's purchase of Mannesmann in 2000.

Any bragging rights the collegiate-looking American from New Jersey state may have earned from the Alcan deal could be dwarfed this week if, as some think, he succeeds in forcing BHP to offer a lot more to acquire Rio than it wants to.

"BHP has been a high," Albanese told reporters in Australia in late January.

A $14 billion raid on 12 percent of Rio's stock on Friday by aluminium makers Chinalco of China and Alcoa Inc of the United Sates only fanned speculation that BHP must sweeten the pot or face an uphill fight.

"If BHP wants this deal to go through, I think they have to offer some cash," said John Meyer of Fairfax Securities in London after Chinalco and Alcoa confirmed the stock purchases.

"Alcan was a very big deal for Albanese, but all that has been lost in the wash because of BHP," said mining analyst James Wilson of DJ Carmichael & Co in Perth, Australia.

Albanese was travelling and unavailable for comment, Rio Tinto spokeswoman Amanda Buckely said.