Has the Hunter Become the Hunted?

Maybe the metals marriage trend won't end with giant Anglo-Australian miner Rio Tinto (NYSE: RTP  ) taking the hand of Canada's large aluminum producer Alcan (NYSE: AL  ) , as was announced last week. Indeed, it now appears that Australia's BHP Billiton (NYSE: BHP  ) and Pittsburgh-based Alcoa (NYSE: BHP  ) -- the latter of whose own offer for Alcan was spurned summarily by its north-of-the-border-rival -- may now be involved in merger talks.

But then, it's been a while since Billiton was not at least rumored to be romantically eyeing another company. Last autumn, when gold and copper producer Freeport McMoRan (NYSE: FCX  ) made an offer for its larger rival, Phelps Dodge, mining and metals seers envisioned the emergence of another bid for Phelps from either Rio Tinto or Billiton. When no such offer was forthcoming, however, Freeport and Phelps tripped down the aisle.

And in May it was assumed -- correctly as it turned out -- that at least one of the giant mining companies would play a white knight role in helping Alcan fend off Alcoa's unwelcome blandishments. Sure enough, last week Rio Tinto offered up $38.1 billion in cash for Alcan, a level not even in the same stratosphere as Alcoa's $28 billion cash and stock offer.

It now appears that the rebuffed Alcoa may be wooed by Billiton, the massive, Melbourne-based mining behemoth with interests across much of the world in oil and gas, coal, aluminum, base metals, carbon steel materials, and precious metals. And while it seems odd to think of Alcoa, with its more than $41 billion market cap, as the smaller member of any potential combination, that figure nonetheless pales beside Billiton's near $200 billion valuation.

A Billiton-Alcoa combination would be a major deal. However, it remains to be seen whether Alcoa CEO Alain Belda can negotiate the sort of sweetheart deal with Billiton that is being presented to Alcan by Rio Tinto. It will also be interesting to watch and see whether other as yet unimagined metals and mining combinations emerge from the woodwork in the weeks and months to come. Clearly, this is a hot sector, one that Foolish investors would be well advised to monitor continuously and carefully.

For related Foolishness:

• Her Name Is Rio and She Dances With Alcan
• The Mother of All Mergers?
• Is Alcoa's Bid for Alcan Backwards?

Fool contributor David Lee Smith owns shares in BHP Billiton, but not in the other companies mentioned. He welcomes your questions or comments. The Motley Fool has a disclosure policy.