(Reuters) -Mining giant Rio Tinto had considered an offer for British miner Anglo American, which is now BHP Group's $39 billion takeover target, the Australian Financial Review reported on Friday.

Rio "management had not ruled out making a play for part or all of the mining group and continued to study the day-to-day situation", the AFR reported, citing sources close to Rio.

The report did not mention why Rio did not make a proposal but said there is no suggestion that Rio is about to make an alternative bid. Rio declined to comment on the report.

BHP shares were down 0.4%, while Rio Tinto was trading flat. The Australian mining index was also flat as of 0438 GMT.

Anglo has turned down BHP's proposal, saying it was opportunistic and significantly undervalues the British company. BHP has until May 22 to make a formal offer under the UK's takeover rules.

Glencore is also studying options for a possible approach for Anglo, Reuters reported earlier in the month, a move that could spark a bidding war.

"Our policy is we don't speculate or comment on M&A activity," Rio's chair, Dominic Barton, said in reply to a question at a shareholder meeting last week on whether the company was considering a rival bid.

BHP and Rio work closely together on the Escondida and Resolution Copper mines, in which they both own stakes.

Rio should not stand against BHP but instead should look at smaller copper and lithium miners, said Daniel Sullivan, portfolio manager of Janus Henderson Investors' global natural resources fund that owns shares in Rio, the AFR report said.

(Reporting by Rishav Chatterjee in Bengaluru and Melanie Burton in Melbourne; Editing by Savio D'Souza and Rashmi Aich)