Rio, which entered into a trading halt prior to announcing the friendly bid, said the transaction had been unanimously recommended by Alcan's board.
The offer represents a premium of 65.5% to Alcan’s all-time-high closing share price of $US61.03 on 4 May prior to aluminium giant Alcoa’s $US27 billion hostile offer.
The deal will see the creation of a combined aluminium group to be called Rio Tinto Alcan.
The group will be led by current Alcan chief executive Dick Evans and will have its global headquarters in Montreal, Canada.
Shares in Rio hit a record high of $105.19 earlier today after sources were reported saying it may be close to a deal to buy Alcan.
Alcan earlier confirmed that it had signed a confidentiality and standstill agreement with a ‘white knight’ bidder, which would rescue the aluminium play from Alcoa’s clutches.
Rumours of a possible white knight offer for Alcan have been circulating for some time now with companies including Brazil’s Companhia Vale do Rio Doce, UK-based Anglo American and Swiss-based Xstrata flagged as other possible bidders.
At market close, Rio was up $1.07 to $103.84, while rival BHP Billiton closed up 92c at $38.72.
BHPB is seeking government approval to export uranium-bearing copper concentrate to China, The Australian newspaper reported today.
It reported the world’s largest miner was considering shipping up to 1.2 million tonnes per annum of copper concentrate from its Olympic Dam mine in South Australia to China, rather than convert the ore into metal at the mine site.
A BHPB spokesperson confirmed the report, but told Dow Jones that it was still in early days.
Base metal prices firmed today, with London Metal Exchange three-month nickel making up some of the losses made earlier in the week.
The metal closed up $US655 to $US33,300/tonne with stockpiles increasing 1.27% to 10,080Mt.
LME copper posted modest gains, with the three-month price for the red metal gaining $US30 overnight to close at $US7940/t.
The bulk of copper plays on Final Call ’s watch list followed suit with Aditya Birla gaining 30c to close at $3.37, Fox Resources adding 7.5c to close at $1.215 and CopperCo closing up 3.5c to 89c.
Supply of copper continues to be disrupted as strike action at Chile’s Collahuasi mine enters its third day, while copper production at Codelco’s Andina and El Teniente mines has been halted due to demonstrations.
Zinc followed copper’s upward trajectory, with the LME three-month price gaining $US70 to close at $US3475.
Spot gold appears to be waning despite a weaker US dollar with the yellow metal closing down $US2.3o to $US662.10/ounce overnight.
Major movers on the Australian bourse included Northern Mining, which gained 6c to close the day at 24.5c after reporting results from its drill program at Blair North, southeast of Kalgoorlie in Western Australia.
The company reported anomalous nickel values up to 1.57% nickel with 16 samples exceeding 1% nickel.
Uranium play Paladin Resources gained 56c to close at $8.38, while at the other end of the spectrum Aquila Resources shed 30c to close at $6.35.
