Rio Tinto Executive Says BHP Iron Ore JV Synergies Could Rise
November 01 2009 - 8:34PM
Dow Jones News
Rio Tinto Ltd. (RTP) Iron Ore Chief Executive Sam Walsh said
Monday estimates of synergies from a planned iron ore joint venture
with BHP Billiton Ltd. (BHP.AU) could rise as the pair share more
information.
The two miners have said they expect potential synergies of more
than US$10 billion from bringing together their businesses in the
Pilbara region of Western Australia and Walsh said that, once
regulatory approval is received, they will be able to make a more
detailed study of potential savings.
"I suspect that when we are able to jump the fence and we are
able to look at the synergies that they have been tracking and
developing versus the ones that we have been developing, there will
in fact be greater opportunity than we originally thought," he told
an investor briefing in Sydney.
Walsh said the iron ore market is expected to remain tight and
that the outlook was positive for miners in the next round of
annual price negotiations with steelmakers.
The iron ore pricing system is evolving, Walsh said, and Rio
Tinto needs to speak directly to Baosteel and the China Iron &
Steel Association to understand what the Chinese are seeking.
Rio Tinto Chief Executive Tom Albanese told the same investor
briefing that there are opportunities in the development of coal
projects in Mongolia.
Coal from Mongolia could end up being sold into the seaborne
markets in China and could attract seaborne prices, Albanese
said.
"From my perspective this is a place we need to be investing,"
he said.
Albanese said Rio already has investments in coal in Mongolia
through its stake in Ivanhoe Mines Ltd. (IVN) and through its own
coal exploration ground.
-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094;
alex.wilson@dowjones.com
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