“This will underpin the Rio share price and also create uncertainty about whether or not BHP will get its deal over the line,” Stephen Bartrop, a resource analyst in Australia, told the local press.

Forging a Tobacco Giant

Hongyun Group and Honghe Group, two major tobacco firms based in southwest China’s Yunnan Province, plan to merge to form a giant cigarette maker, the Shanghai Securities News reported on August 26.

The merger is part of the country’s efforts to consolidate its fragmented tobacco industry. China is currently the world’s largest cigarette producer and consumer with a growing market of more than 300 million smokers.

The report said if the deal were approved, the new group would surpass Imperial Tobacco Group Plc. of Britain to become the world’s fourth largest tobacco producer by number of cigarettes sold. The current top three tobacco producers are Philip Morris International Inc. of the United States, British American Tobacco Plc. and Japan Tobacco Inc.

Textile Growth Slackens

China’s textile sector has shown signs of a slowdown with decreasing output during the first seven months of the year, the China National Textile and Apparel Council (CNTAC) said on August 25.

CNTAC attributed the slowdown to declining overseas demand amid the global economic downturn.

From January to July, the country’s chemical fiber production rose 4.76 percent from the same period a year earlier. But this was 13.23 percentage points less than during the same period last year, touching the lowest growth rate since March 2006, according to CNTAC. Yarn production grew 10.78 percent during the period, but was 9.41 percentage points less than a year earlier.