BHP Billiton Ltd has told Chinese steel makers, the biggest buyers of iron ore, it will refrain from using a potential US$125 billion takeover of Rio Tinto Group to control prices, according to a Chinese executive.
Marius Kloppers, the chief executive officer of the world's largest mining company, on Wednesday met executives of Jiangsu Shagang Group Co, Wuhan Iron & Steel Group and Magang (Group) Holdings Co in Shanghai, said Shagang Chairman Shen Wenrong.
"We told them we want to see reasonable iron ore prices after the merger," Shen said in an interview with Bloomberg News. "They said the prices will be decided by the market."
Iron-ore prices have tripled in the past five years on increased demand and may rise by 50 percent next year, Macquarie Group Ltd said last month.
Kloppers is touring Asian customers this week to win the support of steel makers, which want regulators to block Melbourne-based BHP's bid to create a company that would account for more than a third of global iron-ore trade.
The combined company would rival Brazil's Cia Vale do Rio Doce, the largest producer.
"The merger will definitely put Chinese steel makers in a weaker position in iron-ore talks," Fu Hao, who helps manage US$500 million at E-Fund Asset Management Co, said in Guangzhou. "There are more and more buyers of iron ore, but only two major suppliers after the merger."
(Shanghai Daily November 23, 2007)
