China Assoc: Cannot Yet Call Rio-BHP JV A "New Monopoly"
June 04 2009 - 10:12PM
Dow Jones News
A senior Chinese steel industry official said Friday a new
alliance between Rio Tinto Plc (RTP) and BHP Billiton Ltd. (BHP)
could not yet be called a "new monopoly" in the iron ore market,
but warned that anti-monopoly measures were available if
monopolistic tendencies began to show.
"At this point, it's merely a joint venture," said Zou Jian,
executive director of the Chinese Iron and Steel Association.
"We can't call it a new monopoly yet," he said. "But if it does
become a new monopoly, there will be anti-monopoly measures
available to deal with it."
Rio Tinto is entering into a 50:50 iron ore joint venture with
BHP that spells the end of its planned US$19.5 billion alliance
with Aluminum Corp. of China, or Chinalco.
The association, for now, does not believe the Rio-BHP alliance
would affect 2009 iron ore term price talks, still ongoing between
global miners and Chinese steel mills.
"I don't believe there will be much effect on China on the iron
ore price, because China's too big of a market," Zou said. "That in
itself is an advantage."
-By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588 5848;
chuin-wei.yap@dowjones.com