FTSE 100 mining group Xstrata has confirmed talks with industry rivals over potential consolidation, but said no proposals had been made.

The news knocked 18p off Xstrata's share price to £37.20 as the City showed its disappointment at the lack of a clear suitor.

Media speculation has been rife over Xstrata's future following the move by BHP Billiton on Rio Tinto. Brazilian iron ore giant Vale Inco had been mooted as the likely predator but Anglo American has also been suggested by analysts.

Xstrata made a short statement this morning on the bid position, saying talks had been held regarding mutual interest such as 'industry consolidation'.

None of these 'very preliminary' talks, however, have resulted in any proposal being made either for or by Xstrata, the Anglo-Swiss mining group added.

Xstrata would appear a logical fit for CVRD’s strategy to diversify and expand in North and South America. Xstrata offers substantial growth in copper, zinc and nickel and would enable CVRD to add value through consolidation and through the development of a number of new projects in CVRD’s existing area of operation.

Investment bank Fairfax suggested a tie-up with Rio Tinto could be viable but said other companies could be in play. Head of resources John Meyer added: 'Combining Xstrata with Anglo American would appear less logical on first inspection but would offer significant commodity and geographical diversification.'