http://www.chinadaily.com.cn/

China steel association opposes Rio-BHP iron ore JV

(Xinhua)
Updated: 2009-06-10 11:14

"The joint venture agreement has a strong monopolistic color and Chinese steel mills will resolutely oppose the agreement," the CISA said in a statement on its website.

"The iron ore trade is gradually advancing in the direction of monopoly," the association said. The joint venture has a direct bearing on the interests of Chinese steel plants as China is the biggest buyer of Australian iron ore, it added.

China should have a say in the iron ore trade, especially in Asia, according to the statement.

The CISA said it will allow no market speculation on iron ore trade on the domestic market. It also urged regulators to revoke the licenses of these iron ore importers which were found to have engaged in speculation.

Rio Tinto scrapped a proposed $19.5 billion of investment by Aluminum Corp of China, or Chinalco, on Friday.

The world's third-largest mining company has announced a joint venture with BHP Billiton, the world's second-largest. In the agreement, BHP would pay Rio Tinto $5.8 billion to jointly run iron ore resources of both companies in west Australia.

Mei Xinyu, an economist with the Ministry of Commerce, told Xinhua Monday that China should closely watch the joint venture process and be ready to work with other countries to curb market manipulation when necessary, with the help of anti-monopoly law.

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China Commentary Slams Rio Tinto's "Perfidy"

By: Reuters | 09 Jun 2009 | 08:18 PM ET

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Xinhua said the loss was Rio's.

A commentary by China's official Xinhua news agency on Wednesday slammed Rio Tinto's "perfidy" for scrapping a deal with Chinalco, saying the agreement fell apart due to "possible political prejudice".

Rio ripped up its $19.5 billion deal with state-owned Chinese metals conglomerate Chinalco last Friday, opting to pay a penalty of $195 million to form a joint venture with its rival BHP Billiton instead.

China's huge steel sector, the biggest customer, is deep in talks with Rio and BHP about iron ore prices for this year.

"Chinalco was once called a 'white knight' by a grateful Rio when the Chinese national aluminum manufacturer offered a $19.5 billion investment to the debt-ridden mining concern amid the economic slump," Xinhua said in the English-language piece.

"But Chinalco was quickly dumped when the mining market picked up. The perfidy of Rio the world's third-largest mining company, seems somewhere between short-sightedness and possible political prejudice," it added.

"There is an old Chinese saying: 'A gentlemen's agreement is beyond the letter.' Honesty is the blood of business behavior."