May 14 (Bloomberg) -- BHP Billiton Ltd., the world's biggest mining company, rose the most in five weeks in London trading on speculation state-owned Aluminum Corp. of China may be seeking a stake, mirroring its share raid on Rio Tinto Group.

Aluminum Corp., known as Chinalco, could offer between A$60 ($56) and A$63 a share, Leigh Gardner, head of sales trading at ABN Amro Holding NV in Melbourne, said today by phone. The Beijing-based company in February bought a stake in Rio, which has rejected BHP's $178 billion hostile offer. BHP climbed 4.9 percent on the London Stock Exchange.

China, the biggest buyer of metals, has been hurt by a threefold gain in commodity prices since 2002, prompting producers including Chinalco to make overseas acquisitions. BHP Chief Executive Officer Marius Kloppers said this month he had ``no doubt'' that Chinese investors would buy shares in his company.

``If the Chinese are interested in a stake, it highlights the fact that the commodities story still has some time left to run,'' Paul Xiradis, chief executive officer at Ausbil Dexia Ltd. in Sydney, who helps manage the equivalent of $11 billion, said by phone. ``Shortages will continue, so prices will stay higher for longer.''

BHP rose 98 pence to close at 2,118 pence. The shares closed up 6.1 percent at a record A$48.56 on the Australian stock exchange. An offer at A$63 would represent a premium of 38 percent to BHP's closing price yesterday.

Rio Gains

London-based Rio, the world's third-largest mining company, rose 3.6 percent to 6,881 pence in London after Kloppers said yesterday he wouldn't exclude adding cash to BHP's all-stock offer.

A spokeswoman for Melbourne-based BHP, Samantha Evans, wouldn't comment on the speculation. Li Tangdi, a spokeswoman at Beijing-based Chinalco, said she doesn't have information to provide on the speculation.

China needs raw materials to feed an economy that grew 11.4 percent in 2007, the fastest in 13 years. The nation's biggest commodity companies have said they're concerned the combination of BHP and Rio would concentrate supplies and may wield too much pricing power.

China ``would get a leg in both camps, it is a bit of insurance,'' Michael Heffernan, a senior client adviser with Austock Securities Ltd., said today from Melbourne. ``That's a pretty sensible thing for anybody who's risk averse to be doing.''

Chinese Plans

China is in the ``early stages'' of planning to buy a bigger holding in BHP than the 9 percent Chinalco and Alcoa Inc. acquired in Rio, the Australian newspaper said last month. Chinese authorities had yet to determine which state-owned institution, or steel mill such as Baosteel Group Corp., would take a lead role in buying the stake in BHP, the newspaper said.

A combination of BHP and Rio would vie with Brazil's Cia. Vale do Rio Doce as the largest producer of iron ore. Prices of iron ore and coking coal have risen to records. China is the world's largest consumer of iron ore, copper, aluminum and coal.

China wants to offset the higher prices it's paying, said David Radclyffe, an analyst at Southern Cross Equities Ltd. ``That is one argument and you can't disagree with that.''

Australian Prime Minister Kevin Rudd said in February his nation is open to foreign investment, subject to approval by the Foreign Investment Review Board. Australia blocked a hostile $3.2 billion takeover attempt in 2001 by Royal Dutch Shell PLC for Woodside Petroleum Ltd.

``You have to ask yourself would FIRB actually let the Chinese build a meaningful stake in BHP,'' Southern Cross's Radclyffe said. ``The precedent if you go back to Shell and Woodside is that it is not allowed to happen.''

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.netJesse Riseborough in Melbourne at jriseborough@bloomberg.net

Last Updated: May 14, 2008 12:20 EDT