BEHIND all the frantic meetings, BHP Billiton has spent the weekend desperately trying to figure out one fundamental question. Are the Chinese blockers or carvers?
With Chinalco president Xiao Yaqing preparing for a full-scale public relations offensive in Australia today -- and the deadline for BHP to make a bid this Wednesday -- Marius Kloppers will want the answer very quickly.
But the response from Chinalco and Alcoa may not be what the BHP Billiton board wants to hear.
What BHP is hoping for is that it is facing two companies that actually want to deal, to effectively carve up Rio's assets.
That wouldn't be how Don Argus and Marius Kloppers had planned their happy life with Rio, of course. And it would cost BHP more as a result. But it wouldn't be fatal to the BHP bid.
The difficulty with this logic is that both Chinalco and Alcoa, while extremely careful in their wording, are giving plenty of hints they are prepared to be in Rio for the long term.
In other words, that they are blockers and not carvers.
Naturally, BHP Billiton doesn't like this interpretation one bit and has been quietly suggesting that commercial realities mean it won't work out like that.
Rio's pursuer points particularly to Alcoa's likely desire to acquire Rio' alumina assets, courtesy of Rio's takeover of Alcan.
But Alcoa's chairman and CEO, Alain Belda, was keen to emphasise to reporters in London the significance of his company's partnership with Chinalco, rather than showing any interest in taking particular bits of the Rio empire.
And Chinalco is sounding extremely resolute about its long-term investment in Rio as part of its ``confidence in the long-term prospects of the global mining sector''
Chinalco president Xiao Yaqing's brief courtesy visit and the``voluntary'' briefing of the Foreign Investment Review Board is all about trying to ensure this approach doesn't raise any hackles in Australia. No one will say so out loud, but it's clear that the involvement of Alcoa, even if on a lesser scale, also makes it much harder to mount any campaign about the Chinese government taking over our resources industry.
Still, Chinalco's taking no chances and has hired Hawker Britton -- for a long time extremely close to Labor -- to handle government relations.
So far, Chinalco is not stressing any prospect of making a full bid for Rio or building on its 12 per cent stake. Yet is is allowing plenty of leeway to do so later, should circumstances change.
One way of reading that caveat is: if the BHP bid went ahead or showed any chance of succeeding.
Of course, success would not be likely, even with the still-elusive approval of the Rio board, if a 12 per cent shareholder didn't approve.
To unsettle BHP Billiton further, there were reports of a further $US120 billion war chest being put at Chinalco's disposal by the Chinese government. But for now at least, the Chinalco version of its new ``strategic interest'' is to focus on the benefits for both companies.
Xiao Yaqing is full of polite praise for the management of Rio and the mutual advantages and learning that will accumulate as a result of their new relationship.
BHP Billiton will be far less thrilled with that prospect.
And it doesn't have much time to figure out what to do about it.
