Resource-rich Brazil is in the crosshairs of world mining giants as they race to uncover new deposits to feed red-hot demand for metals from fast-growing economies such as China.

Analysts say the possible mining sector takeover of Rio Tinto by BHP Billiton would boost competition for CVRD on its home turf in Brazil, where some of the world’s richest iron ore reserves are located.

Brazil-based mining sector consultants said on Monday such a tie-up was good for new projects and unlikely to trigger antitrust restrictions in the world’s second-largest iron ore exporting country after Australia. CVRD, in its turn, is the world’s No. 1 iron ore exporting firm.

BHP, the world’s biggest mining house, mapped out its plan on Monday to acquire rival Rio Tinto, signalling it was ready for a long fight despite Rio Tinto’s rejection last week of its $US140 billion ($A154.79 billion) takeover proposal as too low.

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The Age Reports