Xstrata is edging closer to its target

Xstrata increased its holding in mining group Falconbridge by the maximum allowed under Canadian law to 24.5%. Its bid offer expires on 14 August.

The firm said press reports that the deal would be funded by a �2.75bn rights issue were wide of the mark.

"We ourselves can't know the size of any deal at this stage," Xstrata said.

China syndrome

Falconbridge has been at the centre of a prolonged takeover battle. Inco, another Canadian miner, pulled out of the bidding last week, leaving Xstrata the favourite to buy the company.

China's dramatic economic expansion has triggered bid fever in the minerals sector. Nickel and copper are in short supply in China and this has pushed metals prices higher.

On 19 July, Xstrata had raised its offer for the shares in Falconbridge it did not own to 62.50 Canadian dollars per share from C$59.

Xstrata has said it would pay for part of any successful acquisition of Falconbridge by a shares issue, but denied a report in the Sunday Telegraph newspaper that an equity-raising exercise could amount to a near-record �2.75bn.

Xstrata is listed in London but has headquarters in Zurich. A shareholder meeting will take place on 14 August with video links between both locations.

The company mines coal, copper, zinc and alloys around the world and sells on its technologies to other mining concerns.