BHP, Rio may postpone iron ore tie-up: report

30th September 2010, Comments 0 comments

Global mining giants BHP Billiton and Rio Tinto are considering revising or postponing plans to merge their iron ore operations in Australia, a report said Thursday.

A delay beyond the proposed approval date of the end of this year would buy time to learn more about a mining tax being prepared by the government, the Wall Street Journal said, citing unnamed sources close to the matter.

The sources said the Anglo-Australian companies, who have faced resistance from regulators over competition concerns, may also wait for iron ore values to drop, easing fears the joint venture would raise global prices.

Both BHP and Rio declined to comment when contacted by AFP.

Australia's competition body this month agreed to delay ruling on the deal after the two companies asked for more time to talk to foreign regulators. No new date for the decision was set.

Rio chief Tom Albanese recently described the regulatory environment as "challenging", while BHP's head Marius Kloppers said he would give the deal until the end of the year before reviewing its merits, the report said.

The deal has run into headwinds from Australian and European regulators and has also raised concerns among steelmakers in China, the world's top iron ore consumer. The two companies account for more than a third of global production.

Both miners reported bumper profits last month, with BHP more than doubling its annual return to 13 billion US dollars and Rio announcing record first-half earnings of 5.85 billion US dollars.

© 2010 AFP

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