Rio eyes more Chinese tie-ups
By Richard Fu |
August 21, 2010, Saturday
|
Print Edition
Print Edition
MINING giant Rio Tinto said it's seeking more partnerships with China but dismissed speculation a proposed iron ore joint venture with BHP Billiton -- a deal strongly opposed by China and other ore buyers -- is about to collapse.
Australian media reported this week an attempt to combine Rio's and BHP's iron ore operations in Western Australia won't proceed because of regulatory concerns the venture will lead to excessive control in pricing of the commodity.
Speaking in Shanghai yesterday, Rio CEO Tom Albanese reemphasized the synergies -- of at least US$10 billion in cost savings the venture would create -- and said Rio is still seeking regulatory approval from Australian, Chinese and European regulators.
"The synergies are indisputable and large, and they are a prize that's worth everything we can do to achieve," he said.
Rio has sought to mend its ties with China, its key customer in which sales accounts for about a quarter of its total, after last year rejecting a US$19.5 billion investment from Chinese metals producer Chinalco, its largest shareholder. China earlier this year jailed four Shanghai-based Rio employees for taking bribes and stealing commercial secrets.
Last month, Rio agreed to a US$1.35 billion investment from Chalco, the listed unit of Chinalco, in its Simandou iron ore project in Guinea.
"The partnership with Chalco opens the potential for further cooperation with China's state-owned enterprises, focused on assisting China to achieve its goal of securing a sustainable supply of raw materials over the long term," Albanese said on Thursday at a Melbourne Mining Club function in Shanghai.
The speculation that the Rio-BHP tie-up may fail came as BHP this week made a hostile offer for Canadian fertilizer major Potash Corp, raising market concerns whether BHP is able to handle two major acquisitions at the same time.
Potash, a crop nutrient, has become a hot commodity as the world's population grows.
Rio and some Chinese firms are rumored to likely bid for Potash Corp. Albanese yesterday declined to comment whether Rio is keen in Potash Corp.
Australian media reported this week an attempt to combine Rio's and BHP's iron ore operations in Western Australia won't proceed because of regulatory concerns the venture will lead to excessive control in pricing of the commodity.
Speaking in Shanghai yesterday, Rio CEO Tom Albanese reemphasized the synergies -- of at least US$10 billion in cost savings the venture would create -- and said Rio is still seeking regulatory approval from Australian, Chinese and European regulators.
"The synergies are indisputable and large, and they are a prize that's worth everything we can do to achieve," he said.
Rio has sought to mend its ties with China, its key customer in which sales accounts for about a quarter of its total, after last year rejecting a US$19.5 billion investment from Chinese metals producer Chinalco, its largest shareholder. China earlier this year jailed four Shanghai-based Rio employees for taking bribes and stealing commercial secrets.
Last month, Rio agreed to a US$1.35 billion investment from Chalco, the listed unit of Chinalco, in its Simandou iron ore project in Guinea.
"The partnership with Chalco opens the potential for further cooperation with China's state-owned enterprises, focused on assisting China to achieve its goal of securing a sustainable supply of raw materials over the long term," Albanese said on Thursday at a Melbourne Mining Club function in Shanghai.
The speculation that the Rio-BHP tie-up may fail came as BHP this week made a hostile offer for Canadian fertilizer major Potash Corp, raising market concerns whether BHP is able to handle two major acquisitions at the same time.
Potash, a crop nutrient, has become a hot commodity as the world's population grows.
Rio and some Chinese firms are rumored to likely bid for Potash Corp. Albanese yesterday declined to comment whether Rio is keen in Potash Corp.
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