Melbourne, Australia — MININGREVIEW.COM — 23 August 2010 – Anglo-Australian mining giant Rio Tinto has dismissed speculation that its proposed iron ore joint venture with BHP Billiton “’ the biggest mining company in the world”’ was on the brink of collapse due to regulatory disapproval.
Rio Tinto CEO Tom Albanese, responded by saying: “I don’t even know where that came from.”
Albanese was referring to a report in The Sydney Morning Herald that quoted an unidentified senior mining executive as saying the tie-up between Rio and BHP was dead in the water.
“It died months ago,” the executive was quoted as saying. “It’s dead and the coffin’s being lowered into the ground. It’s a matter of finding a face-saving way out in the coming few months,” the executive added.
The reports came as regulators in various countries study plans to merge the Australian iron ore operations of the two companies, which have raised competition concerns.
Albanese insisted the synergies with BHP were indisputable and large. “They are a prize worth doing anything to achieve. We’re going to continue to strive for those synergies,” Albanese was quoted as saying by the Dow Jones Newswires.
The venture, which is expected to deliver more than US$10 billion in savings, is due to take effect in the second half of 2010.
European steel-makers have expressed concerns that the merger would be anti-competitive, while the proposal is also being examined in Australia and China.
The synergies of a tie-up between the world’s second and third-largest iron ore producers have been mooted for years, with BHP dropping a hostile bid for Rio in November 2008 as the global financial crisis took hold.
Rio and BHP declined to comment when contacted by AFP. But the Herald said public relations executives at both companies insisted talks were continuing.
“I think ‘dead’ is a little strong,” one was quoted as saying.