"BHP Billiton's offers, while improved, still fail to recognize the underlying value of Rio Tinto's quality assets and prospects,"' Paul Skinner, Rio's chairman, said after a board meeting in London.
"Our plans are unchanged, and will remain so unless a proposal is made that fully reflects the value of Rio Tinto."
Rio Tinto is the world's third largest mining company and a merger with BHP would rank as one of the biggest-ever corporate takeovers, creating a mining giant.
Steelmakers in China, Japan and Europe have called for BHP's bid to be blocked saying it would give the company too much influence over global iron ore supplies and pricing.
China in particular has expressed fears that the takeover would give BHP the upper hand in pricing the iron ore and other resources needed to fuel its booming economy.
BHP Billiton accounts for around 15 per cent of world iron ore sales, while Rio Tinto is responsible for 24 per cent.
Earlier this week BHP offered 3.4 of its shares for every one Rio Tinto share, an increase from the initial informal proposal of three-for-one.
Marius Kloppers, BHP's chief executive, said the offer had a "compelling logic", delivering billions of dollars in efficiencies and raising the value of shareholdings in both companies.
BHP Billiton is expected to discuss its latest offer with China's state-owned Aluminum Corp. and Pittsburgh-based Alcoa Inc.
Last week the two companies teamed to buy a 12 per cent stake in Rio Tinto's London-listed stock in a move widely seen as an attempt to block or complicate the BHP bid.