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Rio Tinto dismisses conversation of BHP Billiton iron ore JV problems

RIO Tinto has dismissed conjecture its iron ore joint venture with BHP Billiton is set to dead failure because of regulatory disapproval.

“I don’t even comprehend where that came from,” Tom Albanese, chief executive of Rio Tinto, said at a breakfast meeting with reporters today, referring to the theory.

Mr Albanese’s comments come as its mining rival and proposed partner, BHP, turns to agricultural commodities, bidding $US38.6 billion for Potash Corp of Saskatchewan in a affect that renewed questions among analysts on whether BHP is able or volition to pursue two enormous merger projects at the same time.

“The synergies (with BHP) are indisputable and large, and they are a prize desert doing anything to achieve,” Mr Albanese said. “We’re going to remain to strive for those synergies.”

Investors at the ASX however shaved nearly 3 per cent off Rio Tinto by mid-afternoon today. Rio pedigree lost $2.11 to $71.07, after hitting a $71 exhausted, while the benchmark S&P/ASX 200 index was from a thin to a dense state 1 per cent. 

Mr Albanese declined to comment on BHP’s pray for Canada’s Potash. “I’m not a agriculturist, I’m a miner… (but) if the right resource were to reach our way, we’ll look at it,” he said in replication to question whether Rio Tinto would be interested in Potash or similar fertiliser companies.

Mr Albanese held Friday’s briefing in Shanghai of the same kind with part of a headline appearance at a Melbourne Mining Club dependent in China, in which he sought to shore up his visitors’s once-strained, now-amicable relationship with Beijing.

Rio Tinto’s $US1.35 billion deal through Chinalco, to jointly develop the Simandou iron ore mine in the West African abiding habitation of Guinea, sealed late July, “represents a very powerful template in the same manner with we look for other opportunities around the world,” he declared.

He downplayed reports of the Guinean government’s dispute through Rio Tinto over rights to parts of the Simandou property.

“Rio’s pecuniary means in Guinea are in the undisputed southern bloc (of Simandou, what one.) is the basis of the project with Chinalco,” he afore~, adding that Rio has retained claims to the disputed northern piece of the mining area.

Rio Tinto is also in talks by Chinalco over the Oyu Tolgoi copper-gold mining project in Mongolia, that remains dogged by reports of Mongolian politicians’ opposition to Chinese partaking.

But Mr Albanese today repeated a statement the company made to the US Securities and Exchange Commission in July, that Chinalco was the same among a range of financing options currently under consideration to member of a ~ship on Oyu Tolgoi.

The company had been at the centre of a dire clash with the Chinese government over iron ore pricing, as China sought to shatter what it regards as a monopoly in seaborne ore supply held through Rio, BHP and Brazil’s Vale.

The iron ore perseverance’s shift to a quarterly pricing system was a response to increasingly acrimonious government relations, he said.

The quarterly pricing connected view, strongly opposed by Chinese steelmakers, has been “reasonably effective”, and to all intents and purposes all Rio Tinto’s ore business in the third divide was based on quarterly pricing, he said.

“If we descry any customer breaking the quarterly (price system), then we might be in possession of to move to spot (prices).”