BEIJING (AFP)--China said Monday it might undertake an
antimonopoly review on a joint iron ore project between mining
giant Rio Tinto Plc (RTP) and BHP Billiton Ltd. (BHP) after Rio
rejected a Chinese bid for a massive investment.
Anglo-Australian Rio Tinto this month snubbed Aluminum Corp. of
China Ltd. (ACH), or Chinalco, offer of a $19.5 billion cash
injection in favor of a joint venture in Western Australia with
bitter rival BHP Billiton.
"We think (the tie-up of the two companies) will definitely
impact the global iron ore supply and therefore it is natural that
Chinese companies are concerned," commerce ministry spokesman Yao
Jian told reporters.
China is the world's largest iron ore importer while exports by
the two companies account for 36% of the world's total supply, he
said.
"Once the business operators' combined sales in China reached a
certain level, the antimonopoly law will apply," he said.
China's antimonopoly legislation requires firms to get Chinese
government approval before their merger if their aggregate global
revenue exceeds CNY10 billion ($1.46 billion) or if revenue in
China exceeds CNY2 billion.
Authorities will also review the deal if two or more of the
firms each reported more than CNY400 million of revenue in China in
the last fiscal year.
Sales into China generated $11.7 billion of revenue for BHP
Billiton and $10.8 billion for Rio Tinto in the year ended 30 June
2008, according to the miners' Web site.
It was unclear how China might enforce its decision if it were
to deem the joint venture in violation of its antimonopoly
legislation.
Yao said the government hadn't yet had any application from Rio
Tinto or BHP Billiton on the joint venture deal.
Separately, he said, the decision by Rio Tinto to reject the
Chinalco offer was "a business decision," adding Chinese companies
would "definitely continue" to seek to expand overseas and the pace
w "even pick up in the future."
He said China would remain open to foreign investment and would
"have no reason to take inappropriate measures" to retaliate.