BHP, Rio Tinto joint venture 'dead in water': report

20th August 2010, Comments 0 comments

A major iron ore joint venture between mining giants BHP Billiton and Rio Tinto is "dead in the water", a report said Friday, citing an unnamed executive.

The Sydney Morning Herald report came as regulators in various countries study plans to merge the companies' Australian iron ore operations, which have raised competition concerns.

"It died months ago," the senior mining 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 Anglo-Australian companies declined to comment when contacted by AFP. But the Herald said public relations executives at both firms insisted talks were continuing.

"I think 'dead' is a little strong," one was quoted as saying.

The venture, which is expected to deliver more than 10 billion US dollars 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.

© 2010 AFP

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