BHP CEO seeks to convince market of need for merger

Wednesday, 21 November 2007 15:21:21 (GMT+3)   |  
       

CEO of Australia-based iron ore giant BHP Billiton Ltd., Marius Kloppers, is today meeting with Chinese steelmakers in a bid to convince them of the advantages of the proposed merger between BHP Billiton PLC (BHP) and fellow mining giant Rio Tinto PLC (RTP). In support of the merger, Mr. Kloppers has declared that the combined company would be capable of producing more iron ore at a faster rate than currently is possible.

Klopper's Asian tour covering South Korea, China and Japan is a part of BHP's efforts to win the support of steelmakers who have threatened to urge competition authorities to block any merger due to fears of a monopoly. A merger between the two companies in question would account for around 38 percent of the seaborne iron ore trade - similar to the percentage claimed by Brazilian miner Companhia Vale do Rio Doce (CVRD).

Earlier this week, many major steel industry institutions and associations, including Japan Iron and Steel Federation (JISF), China Iron and Steel Association (CISA), International Iron and Steel Institute (IISI), voiced their opposition to the proposed merger, saying that the combined company will "have more pricing control over iron ore trading."

If successful, the merger would create the world's largest producer of coking coal, thermal coal, copper and aluminum, and account for almost 40 percent of China's and 60 percent of Japan's iron ore imports.


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