W Australia Premier: Don't Personally Favor Rio-BHP JV
July 23 2009 - 3:23AM
Dow Jones News
Western Australia Premier Colin Barnett said Thursday he doesn't
personally favor a joint venture proposed between Rio Tinto Plc
(RTP) and BHP Billiton Ltd. (BHP).
"I have a concern about having the Pilbara dominated by one"
entity, Barnett said at the Australia China Bilateral Investment
Seminar, referring to an Australian region rich in iron ore, where
both BHP and Rio have operations.
The Rio-BHP proposal would require approval from the Western
Australia state government, Barnett said.
He said he would apply close scrutiny to the proposed deal
between the miners.
"I can assure you I will be taking a far stronger hand in
assessing how the (Rio-BHP joint venture) relates to its customers
in China, Japan, Korea and elsewhere."
Barnett struck a critical note on the way he felt miners have
allowed commercial pursuits to spill over into diplomatic
tensions.
"One of the problems we've had in recent times is that the
relationship between Australia and China, and between Western
Australia and China, has been partly determined by the actions of
individual companies," he said.
"It's fine for them to pursue commercial interests, but
governments have a role in the relationship between nations and
policies that have been affected."
The proposed Rio-BHP deal "has a fair way to go," he said.
"I suspect the (joint venture) will occur, but not in a way that
Rio and BHP might currently imagine."
The two Anglo-Australian miners' joint venture in iron ore
operations emerged from the collapse of Rio's failed alliance with
Aluminum Corp. of China, or Chinalco, in early June.
The proposed BHP-Rio joint venture has attracted fierce
criticism in China as concerns about monopolistic tendencies in
iron ore supply further cloud already troubled negotiations on this
year's iron ore term prices.
Barnett told reporters he had no new details to shed on Rio
Tinto employee Stern Hu, an Australian citizen held by the Chinese
government on charges of stealing state secrets and bribery in the
course of the miner's iron ore price talks with China.
-By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588 5848;
chuin-wei.yap@dowjones.com