Rio Tinto unveils $7.44bn profit

Rio has been resisting BHP's plans for a takeover

Takeover target Rio Tinto has unveiled a $7.44bn (£3.8bn) profit for 2007 - 1% higher than a year before - on the back of surging commodity prices.

Analysts say the results leave the mining firm well placed as it fends off a hostile bid from rival BHP Billiton.

Anglo-Australian giant Rio last week rejected a $147bn (£74.8bn) takeover offer from BHP.

Demand for raw materials such as copper and coal from nations such as China is driving consolidation in the sector.

The results included a 9% rise in profits in the second half of the year.

'Value'

Annual production of aluminium, iron ore, bauxite, refined gold and refined copper were at record levels, the firm said, adding that commodity prices were expected to remain high.

Announcing the results, Rio's chairman Paul Skinner told the BBC that BHP Billiton needed to raise its offer "considerably" before the firm would enter talks.

"We have just announced record results and clearly have a very viable independent future.

"For us to become persuaded by the arguments for the combination we would need to see an offer for our shareholders that offers higher value than we could achieve ourselves," he said.

BHP's bid for Rio offered 3.4 of its shares for each Rio share.

This was higher than its previous informal three-for-one proposal, worth $130bn, that was first announced in December of last year.

BHP has warned Rio that it is not willing to sweeten its offer any further.