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China may conduct anti-monopoly review on Rio, BHP tie-up
Beijing (AFP) June 15, 2009 China said on Monday it may undertake an anti-monopoly review on a joint iron ore project between mining giant Rio Tinto and BHP Billiton after Rio rejected a Chinese bid for a massive investment. Anglo-Australian Rio Tinto this month snubbed Chinalco's offer of a 19.5-billion-dollar cash injection in favour 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 percent of the world's total supply, he said. "Once the business operators' combined sales in China reached a certain level, the anti-monopoly law will apply," he said. China's anti-monopoly legislation requires firms to get Chinese government approval before their merger if their aggregate global revenue exceeds 10 billion yuan (1.5 billion dollars) or if revenue in China exceeds two billion yuan. Authorities will also review the deal if two or more of the firms each reported more than 400 million yuan of revenue in China in the last fiscal year. Sales into China generated 11.7 billion dollars of revenue for BHP Billiton and 10.8 billion dollars for Rio Tinto in the year ended 30 June 2008, according to the miners' website. It was unclear how China might enforce its decision if it were to deem the joint venture in violation of its anti-monopoly legislation. Yao said the government had not 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. Share This Article With Planet Earth
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