SYDNEY: Global miners BHP Billiton and Rio Tinto expect their US$116 billion (RM364.24 billion) iron ore joint venture will fail to gain regulatory approval, the Sydney Morning Herald reported on Friday, Aug 20.
The question mark over the tie-up which would generate US$5 billion in cost savings annually for BHP Billiton comes as the mining giant launches a US$39 billion hostile bid for Potash Corp.
Rio Tinto and BHP Billiton officials in Australia on Friday declined to comment on a media report which quoted mining executives saying competition regulators in various jurisdictions had rejected the two miners' arguments that the venture would not have price-setting power.
"It's dead and the coffin's being lowered into the ground. It's a matter of finding a face-saving way out in the coming months," the Sydney Morning Herald newspaper quoted one senior mining executive as saying. The executive was involved in talks with regulators, it reported.
BHP shares were down 1.4% at A$37.78 (RM105.62) by 0028 GMT in Sydney, while Rio Tinto stock lost 2.1% to A$71.68. The broader market fell 1.1%.
Rio Tinto chief executive Tom Albanese is speaking at a mining industry event in Shanghai on Friday morning.
The newspaper said the regulatory mood had turned against the joint venture after the world's top three iron-ore miners ' Rio, BHP Billiton and Brazil's Vale ' imposed quarterly iron ore pricing on their reluctant Asian customers this year.
Rio Tinto and BHP Billiton want to combine their iron ore operations in western Australia, estimating they will share in US$10 billion in cost savings. They had hoped to gain regulatory approval by the end of this year.
But the venture, unveiled last December, is awaiting approval from regulators in Australia, Europe, China and elsewhere, and sceptical regulators, especially in Europe, have indicated their reservations by issuing a barrage of queries, the paper said.
BHP Billiton this week launched a US$39 billion hostile bid for Potash Corp, the biggest takeover deal this year, and some suggest the deal could take BHP's resources away from pushing the iron ore joint venture. ' Reuters
The question mark over the tie-up which would generate US$5 billion in cost savings annually for BHP Billiton comes as the mining giant launches a US$39 billion hostile bid for Potash Corp.
Rio Tinto and BHP Billiton officials in Australia on Friday declined to comment on a media report which quoted mining executives saying competition regulators in various jurisdictions had rejected the two miners' arguments that the venture would not have price-setting power.
"It's dead and the coffin's being lowered into the ground. It's a matter of finding a face-saving way out in the coming months," the Sydney Morning Herald newspaper quoted one senior mining executive as saying. The executive was involved in talks with regulators, it reported.
BHP shares were down 1.4% at A$37.78 (RM105.62) by 0028 GMT in Sydney, while Rio Tinto stock lost 2.1% to A$71.68. The broader market fell 1.1%.
Rio Tinto chief executive Tom Albanese is speaking at a mining industry event in Shanghai on Friday morning.
The newspaper said the regulatory mood had turned against the joint venture after the world's top three iron-ore miners ' Rio, BHP Billiton and Brazil's Vale ' imposed quarterly iron ore pricing on their reluctant Asian customers this year.
Rio Tinto and BHP Billiton want to combine their iron ore operations in western Australia, estimating they will share in US$10 billion in cost savings. They had hoped to gain regulatory approval by the end of this year.
But the venture, unveiled last December, is awaiting approval from regulators in Australia, Europe, China and elsewhere, and sceptical regulators, especially in Europe, have indicated their reservations by issuing a barrage of queries, the paper said.
BHP Billiton this week launched a US$39 billion hostile bid for Potash Corp, the biggest takeover deal this year, and some suggest the deal could take BHP's resources away from pushing the iron ore joint venture. ' Reuters
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