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LONDON (MarketWatch) -- Rio Tinto said Monday it was buying three ships to lug iron ore from Western Australia to China and other locations as demand for the raw ingredient to produce steel heats up.
Rio Tinto (RTP)(RIO) said it's buying three ships for $315 million, and has reserved rights on another two vessels.
Each will be able to carry 250,000 metric tons of iron ore. The vessels are being built by Namura Shipyards (7014) in Japan and will be delivered from late 2012.
The mining giant wants to triple its iron-ore production per year from Australia and Guinea to over 600 million metric tons per year.
"Competitive freight and freight management are important levers in our growth plans. These very large ore carriers will assist us in continuing to provide our customers with better delivery options well into the future while locking in low, long term freight rates for the benefit of our shareholders," said Sam Walsh, chief executive of Rio Tinto Iron Ore.
Iron ore is a reason that BHP Billiton (BHP)(BLT) has cited for trying to buy the London-based metals group.
If BHP were successful in its takeover offer for Rio Tinto -- and if competition authorities in Europe and elsewhere signed off -- the combined firm would control about a third of the world's iron ore production, leaving Brazil's Vale (RIO) as the only other serious competitor.
BHP has until Feb. 6 to either announce a firm intention to make an offer for Rio Tinto or to say it doesn't plan to make an offer. Rio Tinto has said BHP's proposal to swap three of its shares for every Rio Tinto share would undervalue it.
Xemplar interest
Separately, Rio Tinto is interested in buying Xemplar (XE), a Canadian uranium explorer with operations in Namibia, according to a report in The Sunday Express. Rio wants an independent verification of a Xemplar site in Namibia before bidding, the newspaper reported.
The group had a market capitalization of C$737 million ($742 million) as of Friday, but is worth close to $2 billion, according to Marc Elliott, an analyst at Fairfax in London.
Besides Rio, France's Areva (004524) or a Chinese firm may have interest in buying Xemplar, Elliott added.
Xemplar shares jumped 23% in early trading in Canada. Rio Tinto shares slipped 2.8% in London.
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