SYDNEY (AFP)--Australia Friday shrugged off Chinese threats to
slap trade sanctions on two mining giants after a massive deal went
sour, describing the reported comments as "argy bargy."
Resources minister Martin Ferguson said it was normal for
Beijing to be unhappy after Rio Tinto Ltd. (RIO.AU) snubbed
Chinalco's offer of a record cash injection in favor of a joint
venture with bitter rival BHP Billiton Ltd. (BHP).
"Obviously China is disappointed. You can expect some angst but
I believe we'll return to a normal commercial alliance," Ferguson
told ABC Television.
"China has got to understand that the arrangement between BHP
and Rio is a commercial outcome."
Ferguson was speaking after the Sydney Morning Herald said
Beijing threatened trade sanctions against Rio and BHP if they go
ahead with plans to combine their iron ore businesses without
getting Chinese permission first.
"According to China's antitrust law, we can veto such a merger
agreement if the concentration of overseas business operators will
affect domestic market competition," a senior Ministry of Commerce
official was quoted as saying in Beijing.
Chinese state media earlier hit out at the "perfidy of Rio" and
blamed politics for the deal's collapse following strident
opposition from some Australian lawmakers.
"There is an old Chinese saying: 'A gentlemen's agreement is
beyond the letter.' Honesty is the blood of business behavior," a
Xinhua news agency editorial said.
"For Chinalco, the one-time failure in international trade will
soon fade. Yet for Rio Tinto, it will take years to overcome the
lost honesty and tainted image," it added.
Japan's competition watchdog has also said it might probe the
joint venture while European steel makers have called for similar
action from the European Union.
Ferguson played down the concerns and said BHP and Rio would
maintain proper commercial relations with its big trading
partners.
"We are in the middle of a range of price negotiations with
important commodities at this point in time," he said.
"From time to time there's going to be argy bargy about foreign
investment considerations."
Anglo-Australian company Rio and BHP, the world's biggest miner,
plan to join their massive iron ore operations in Western
Australia, saving some $10 billion.
Rio also announced a $15.2 billion rights offering as it walked
away from state-owned Chinalco's $19.5 billion cash injection,
which would have been China's biggest foreign investment.
China is a key market for Australian commodities, which it has
tapped to fuel its industrial boom of recent years.