The mystery buyer snapping up shares in Fortescue Metals Group may be planning a move on the iron ore miner, an analyst says.
A 2.9 per cent interest in Fortescue has been bought by an undisclosed party in recent weeks.
Observers speculate that it could be Canadian mining giant Teck Resources.
Hong Kong-based commodities trader Noble Group has denied buying the stake.
IG Markets institutional dealer Chris Weston said Swiss mining giant Xstrata was another possibility.
Mr Weston said Xstrata and Teck had the financial clout to make a serious move on Fortescue, including acquiring the more than 30 per cent stake owned by Fortescue founder and chairman Andrew Forrest.
Mr Forrests' holding is seen as a blocking stake to any hostile bid.
"I don't think that (buying Mr Forrest's stake) would be an insurmountable challenge," Mr Weston told AAP.
"If they (the mystery buyer) were going to look to some sort of tie-up as a major shareholder, that would be a good situation as well."
Mr Weston said Fortescue was looking quite cheap compared to bigger iron ore miners and was attractive because it had its own infrastructure in Western Australia's Pilbara region and was embarking on new mine developments.
It was also expanding existing production to big-league levels, Mr Weston said.
Shares in Fortescue rose for the second consecutive day on Tuesday, closing up two per cent at $5.61 - a near five-month high - after reaching an intraday high of $5.74 and gaining almost five per cent on Monday.
Mr Weston said the market responded favourably to Fortescue's announcement after the market close on Monday that it had secured an exclusive option to mine Iron Ore Holdings' Iron Valley project in the Pilbara, near Fortescue's Nyidinghu project.
Fortescue is slated to release its first half results on Wednesday.
