MAC: Mines and Communities

Steel barons turn up heat on BHP/Rio deal - Mittal estudio participar en batalla por Rio Tinto

Published by MAC on 2008-07-01

FT report said Mittal may enter Rio Tinto fight

London-based Indian industrialist Lakshmi Mittal, the fourth richest person in the world, may be considered getting involved in the takeover fight for Rio Tinto.


30th June 2008

LONDON Lakshmi Mittal is looking at entering the takeover battle for the Rio Tinto mining group, the Financial Times reported on Monday, quoting people familiar with the situation.

Mittal, main shareholder in steelmaker ArcelorMittal as well as being chairman and chief executive, was keen to secure larger supplies of iron ore, said the newspaper.

Rio, one of the world's major producers, is the subject of a contested bid by Australian mining group BHP Billiton, worth about $160 billion at present share prices. The deal is being scrutinised by anti-trust regulators.

The Financial Times said Mittal's thinking emerged as his adviser Goldman Sachs announced he had joined the board of the Wall Street bank.

"Mr Mittal has considered some involvement in the takeover, such as the idea of taking a stake in Rio through buying from existing shareholders," it quoted an unnamed banker as saying.

"On the other hand, he could wait until later, when quite possibly some of the iron ore assets (of Rio) go on sale as a result of demands by anti-trust regulators," said the banker.

The Financial Times said bankers believed Rio's iron ore assets were currently worth about $50 billion. But this figure could fall sharply in the next few months, particularly if the boom in steelmaking starts to peter out.

No immediate comment was available from ArcelorMittal on the report. (Reporting by Ralph Gowling; Editing by Tomasz Janowski)

Corus boss Philippe Varin blasts Rio Tinto takeover as iron ore soars

James Ashton, Sunday Times

29th June 2008 THE STEELMAKER Corus has stepped up its campaign against BHP Billiton's attempt to take over mining rival Rio Tinto by complaining to the European Union about the deal.

Philippe Varin, who still runs Corus after its takeover last year by Tata Steel of India, is concerned the £100 billion tie-up would raise competition issues.

Several regulators around the world are examining BHP's plan for a hostile takeover of Rio Tinto, launched last November.

"We were recently questioned by the EU about BHP/Rio," Varin said. "We gave our very, very strong negative sentiments on further concentration in the iron-ore industry."

Steelmakers have been hit by steep price rises. The price of iron ore has soared in the past five years, driven by the construction boom in China. Rio Tinto last week sealed an agreement to nearly double the price of its iron-ore shipments to China's biggest steelmaker, Baosteel.

BHP and Rio Tinto have called for the traditional annual round of price talks to be replaced by an index pricing system that would give them much greater flexibility.

If they combined, the pair would control about 36% of the world's seaborne trade in iron ore, which sets the price used in annual contract talks. Together with Brazilian miner Vale, the world leader, the tie-up would in effect create a duopoly.

Varin added: "If you link this with a spot-price approach, what does a spot price mean when there is a very concentrated base of producers and when two producers of iron ore would have 70% of the market? Would it really be a spot price dictated by the market? I don't think so."

Baosteel's willingness to pay Rio Tinto as much as 96.5% more for iron ore than its old contract is the largest price rise in more than a decade, suggesting the commodities boom is still accelerating.

Chinese mills had been expecting a price rise of at least 65%, in line with the increase negotiated between Vale and Asian steel producers in February. BHP is still in talks with its customers and has hinted that it might angle for even more.

Marius Kloppers, BHP's chief executive, said last week that the premium paid to Rio Tinto over and above the Vale settlement was "a step in the right direction".

BHP argues that the combination with Rio Tinto would not cause economic harm. On the contrary, it would help customers by boosting supply, it claims.

The company measures market share differently, arguing that it has only 25% of the wider iron-ore market that includes domestic iron consumption.

Still, regulators are expected to demand sell-offs, especially on operations at Pilbara in western Australia, the world's biggest source of iron ore. Anglo American, run by Cynthia Carroll, is best placed to acquire any assets that must be sold. She is looking to build up Anglo's iron-ore arm.

Mittal estudia participar en batalla por compra de minera Rio Tinto*

Reuters, 30 de junio 2008

LONDRES (Reuters) - El magnate indio Lakshmi Mittal estudia entrar en la batalla por la adquisición del grupo minero Rio Tinto, informó el lunes el diario Financial Times, citando a personas familiarizadas con la situación.

Mittal -principal accionista, presidente y presidente ejecutivo de la siderúrgica ArcelorMittal - estaba interesado en asegurar más provisiones de mineral de hierro, informó el periódico.

Rio, uno de los mayores productores del mundo, ha recibido una oferta del grupo minero australiano BHP Billiton de alrededor de 160.000 millones de dólares, según el precio actual de las acciones. El acuerdo está siendo revisado por reguladores antimonopolio.

Un portavoz de ArcelorMittal, el mayor productor de acero del mundo, declinó hacer comentarios.

Los papeles de Rio Tinto subían un 2,7 por ciento en Londres, a 5.999 peniques, a las 1255 GMT, mientras que los de BHP Billiton avanzaban un 1,65 por ciento, a 1.906 peniques, y los de ArcelorMittal cedían un 1,4 por ciento, en Amsterdam, a 62,78 euros. "El señor Mittal ha considerado cierto involucramiento en la adquisición, como tomar una participación en Rio mediante compras de accionistas existentes," señaló el diario citando a un banquero no identificado.

"Por otro lado, podría esperar hasta más tarde, cuando posiblemente algunos de los activos de mineral de hierro (de Rio) estén a la venta como resultado de las exigencias de los reguladores de la competencia," comentó el banquero.

El Financial Times reportó que los banqueros creían que los activos de mineral de hierro de Rio tenían un valor actual de alrededor de 50.000 millones de dólares. Sin embargo, esta cifra podría caer profundamente en los próximos meses, particularmente si comienza a esfumarse el auge de la industria siderúrgica.

(Reporte de Ralph Gowling; con la colaboración de Michael Shields en Fráncfort; Editado en español por Juan José Lagorio)

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