Another bidder walks away from Rio's Canada iron ore

Rio Tinto (NYSE:RIO) will have to look further afield after another potential bidder for its Iron Ore Company of Canada (IOC) operation withdrew from bidding on Tuesday.

Bloomberg reports China's Minmetals considered the asking price, in the $3.5 billion to $4 billion range, too high.

Beijing-based Minmetals will now turn its attention to a bid for a Glencore Xstrata's (LON:GLEN) massive Las Bambas copper project in Peru, which could fetch as much as $5 billion.

Minmetals, China's largest iron ore and steel trader, interest in Canada's iron ore belt extends beyond IOC with equity investments in Century Iron Mines (TSE:FER), a billion tonne resource company advancing a number of projects in the Labrador Trough.

Earlier in October  Canada's Teck Resources, reportedly also put off by the rich valuation, also lost interest in 18 million tonnes a year IOC, which is 59% owned by Rio.

Private equity firms Apollo and Blackstone and Glencore dropped out of the bidding process for the Newfoundland/Labrador-based unit early on.

Benchmark import price of 62% iron ore fines at China's Tianjin port was trading $133.20 a tonne on Tuesday, near its average for the year, according to data provided by SteelIndex.

The price of the steelmaking raw material is up 20% from its 2013 lows struck at the end of May and has defied predictions of a slump due to a slew of new capacity hitting the market through 2017.

Some observers argue that given the relatively robust iron ore price, Rio may decide to hang onto IOC, which is itself expanding output to 23 million tonnes per annum.

Image courtesy of IOC.