Mumbai: China's state-owned aluminium producer Aluminum Corporation of China (Chinalco) has teamed up with US group Alcoa to acquire a 12 per cent stake in Rio Tito for $114 billion, putting pressure on BHP Billiton.

The $14 billion Chinese swoop comes days ahead a regulatory deadline for BHP to make a firm offer for London-listed Rio or to walk away.

Rio Tinto chairman Paul Skinner said in a terse statement, "This unsolicited development, of which we had no prior notice, reinforces our view of the long term value of Rio Tinto. In line with our long standing strategy, we shall continue to focus on operating our many world class assets to maximise value and prospects for all shareholders."

Chinalco and Alcoa said they had bought a 12 per cent stake in Rio, the world's No 2 miner by market value, giving them a total holding in the group of around 9 per cent, including Rio's Australian listed shares. Chinalco takes up the most part of the 12 per cent, company sources said.

The two companies paid a total of $14.05 billion for the holding through a Singapore-based entity, with Alcoa contributing up to $1.2 billion.

The transaction was executed by investment bank Lehman Brothers at £60 a share, 21 per cent above Rio's closing price of £49.56 pounds yesterday. The 12 per cent blocking stake may not require approvals from the foreign investments review board.

Chinalco and Alcoa said they do not intend to make an offer for the whole of Rio, but are waiting for a third party to make a firm bid.

"This investment, made in partnership with Chinalco, allows us to mutually benefit from developments in the sector," Alcoa chairman and chief executive Alain Belda said.

Rio acquired Canadian aluminium producer Alcan for $38 billion in May last year in the biggest yet deal in the mining sector.

Rio also rejected a 3-for-1 all-share take-over offer from BHP, worth $127 billion at current prices, saying it was too low. (See: BHP Billiton may have to offer a 60-per cent premium for hostile takeover of Rio Tinto) A Rio spokesperson said the 12 per cent stake demonstrated that BHP's three-for-one all-share offer significantly undervalued Rio and its prospects.

The BHP offer, if accepted, would have created a $318 billion entity with a massive controlling force across a range of commodities such as copper, aluminium, iron ore and coal.

BHP's offer for Rio is now worth about £50 against its current market price of over £57 pounds.

BHP's offer, announced on November 8, has sparked a frenzy of activity in the mining industry, with companies vying to get a bigger slice of booming commodities markets. Brazil's Vale last month said it was in talks to buy Anglo-Swiss group Xstrata in a deal worth around $100 billion. (See: Vale in talks with Xstrata for a $100-billion merger news)