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Australian watchdog flags concerns over BHP-Rio merger
Sydney (AFP) Aug 22, 2008 Australia's competition watchdog raised concerns about mining giant BHP Billiton's bid for rival Rio Tinto Friday, saying the merger could hurt competition in the global trade of iron ore. In a statement, the Australian Competition and Consumer Commission (ACCC) said if BHP Billiton successfully acquired Rio, it would bring together two major global suppliers of the material essential for steel-making. "The ACCC's market inquiries indicated that the proposed acquisition may raise competition concerns in relation to the global seaborne supply of iron ore lump and iron ore fines," it said. "To the extent the proposed acquisition lessens competition in the global seaborne supply of iron ore it would be likely to have the effect of increasing global iron ore prices, which would in turn increase prices paid by steel makers in Australia." BHP Billiton and Rio Tinto are the world's biggest and third-biggest mining companies respectively. In February, BHP embarked on a takeover bid for Rio which has been rejected by its smaller rival. China, whose insatiable demand for raw materials has driven a surge in the price of iron ore, has previously expressed concerns the mega-merger would create a behemoth with too much power over commodity prices. The ACCC said its inquiries indicated that the proposed acquisition "may enable the merged firm to increase domestic prices of iron ore lump and iron ore fines by more than any increase in global iron ore prices." It could also have the ability and incentive to influence global supply and global prices for iron ore lump and fines, it added. But the ACCC said the supply of metallurgical or thermal coal, bauxite, smelter grade alumina, gold or uranium were unlikely to pose concerns. While not a final decision, the ACCC statement provides the body's preliminary views and identifies lines of further inquiry. The ACCC said it expected to reach a final decision on the matter by 1 October. BHP's current 3.4-for-one share offer for Rio Tinto was originally valued at 147.4 billion US dollars but changes in share prices mean Dow Jones Newswires now values the bid at 148.2 billion US dollars. -- Dow Jones Newswires contributed to this story -- Related Links Surviving the Pits
Death toll in China coal mine blast rises to 26: state media
Beijing (AFP) Aug 22, 2008The death toll from a gas explosion at a coal mine in northeast China rose to 26 on Friday, state media reported. |
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