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BHP Billiton, the world's largest mining company, has attempted to sweeten its proposed offer for rival Rio Tinto.

In a statement today the company pledged to return $30 billion (£14.4 billion) to shareholders through a share buyback if a deal goes ahead.

The move comes after Rio Tinto rejected a proposed all-share offer made by BHP Billiton last week, stressing that the approach "significantly" undervalued its business.

BHP Billiton has confirmed that Rio Tinto has yet to agree to discussions over its proposed offer for the company and said it was making further details about its plans available in order to facilitate such talks.

The company said: "BHP Billiton now considers it appropriate to make BHP Billiton and Rio Tinto shareholders aware of this proposal so that it can seek their support for discussions between the two companies."

However a Rio Tinto spokesman, quoted in reports, stressed that the proposed bid already rejected by the company's board remained "well out of the ballpark".

BHP Billiton says its proposal to offer three of its shares for each Rio Tinto share constitutes a premium of approximately 28 per cent for the latter's investors.

The mining giant, which claims that a tie-up between the two groups would create the world's "premier diversified natural resources company", also said today that a deal would deliver cost savings of $3.7 billion (£1.8 billion) per annum after seven years.

Meanwhile the combined group would be "uniquely positioned" to meet strong and growing demand for natural resources from expanding economies such as China and India, BHP Billiton insisted.