RIO TINTO is expected to raise the stakes in its takeover battle with BHP Billiton by telling shareholders this week that its aluminium business is worth up to $20 billion (£9.9 billion) more than current estimates.

Up to 30 analysts expect the new figures to be provided when they tour the miner’s aluminium operations at Saguenay, Canada. They became part of Rio last year after it bought Alcan, the North American group.

Rio executives - including chief executive Tom Albanese - are expected to highlight recent rapid increases in the price of aluminium, which has gone from $1.15 a pound last year to the current spot price of $1.40.

Each 10c increase could boost Rio’s earnings by about $500m. When added to greater synergies from the Alcan acquisition and forecasts for higher global demand fuelled by China’s construction boom, the value of the business could rise by $20 billion, bullish analysts believe.

A revaluation would push up Rio’s shares, which closed the week at £55.94, and renew pressure on BHP to improve the price it has offered to buy the group. BHP has tried to lure shareholders with an offer of 3.4 of its shares for every one in Rio, a ratio that values Rio at about £76 billion. The offer was rejected. Bankers and analysts believe BHP may have to sweeten the deal with a cash injection if it is to win the day.

A successful reassessment of the aluminium business would follow a pattern established by Rio with a revaluation of its iron-ore division. Rio executives have devoted a great deal of effort to explaining to investors the value of the operations and their exposure to the Chinese industrial boom.

BHP has tried to attack Rio’s prospects on aluminium, saying its exposure to North America made it vulnerable to a US down-turn, and maintaining that Rio overpaid when it bought Alcan for $44 billion.

But Rio is this week expected to argue that the recent rise in aluminium prices has confirmed its judgment.

The mooted BHP-Rio tie-up is the largest of a series of mega-mergers that could transform the international mining scene over the next 12 months.

Vale, the Brazilian iron-ore giant, is preparing a bid for London-listed Xstrata. The two sides are understood to have agreed on price – Vale would pay the equivalent of £45 a share in cash and its own shares, valuing Xstrata at £43 billion.

The Sunday Times last week revealed the sticking point was the demand of commodity trader Glencore, which owns 34.6% of Xstrata, for marketing rights from the combined group. It wants 10 years of rights while Vale has offered only five.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive