BHP Billiton CEO: Hopes EU Anti-Trust Issues To Be Manageable
June 05 2009 - 2:25AM
Dow Jones News
BHP Billiton Ltd. (BHP) Chief Executive Marius Kloppers Friday
said he hoped for "manageable" anti-trust issues with European
Union regulators for its proposed Pilbara iron ore joint venture
with Rio Tinto Plc (RTP).
Kloppers said he expected the 50/50 joint venture, which would
combine the companies' adjacent Pilbara mines and reap US$10
billion in synergies across rail and haulage, to be notifiable to
the E.U.
However, anti-trust regulators would be deciding on a very
different case compared with BHP's failed all-share takeover offer
for Rio last year, when E.U. approval turned out to be a major
stumbling block.
"Firstly, the scope is very different. It excludes mines such as
Samarco or (the Rio project) Simandou. It is also truncated in
completeness of business scope," Kloppers said during an analyst
call.
Under the terms of the agreement, Rio and BHP will set up a
separate marketing body that will share no pricing knowledge with
its owners.
However, the alliance would still combine a massive production
region in global seaborne iron ore business that is the key
supplier to China and Japan.
During the 2007-08 financial year, Rio produced a total of 153
million metric tons of iron ore. Just over 142 million tons of that
came from the Pilbara.
Likewise for BHP, 103 million tons came from Western Australia
state, out of a total of 111 million tons.
Should a JV eventuate, global iron ore giant Vale S.A. (VALE)
will probably still dominate seaborne trade, producing 302 million
tons during calendar 2008.
-By Elisabeth Behrmann, Dow Jones Newswires;
61-2-8272-4689 elisabeth.behrmann@dowjones.com