Normally, I don’t write posts two days in a row. This one, however, will be brief:
The BBC is reporting that Rio Tinto has halted trading of all it shares , on reports that it may be backing out of a deal worth 19.5 Bln dollars with China’s state-owned Chinalco.
That same report states that the deal was halted on concerns that China would use their stake in Rio to control the commodities markets. I have to ask, with all their analysts and highly paid consultants, is this really the first time that they considered that possibility? I wrote about this type of scenario yesterday in my piece on China, and indirectly referred to this kind of consolidation earlier this year, in our ” State of the Mining and Tire Industry“.
Update: Reuters has just confirmed that BHP Billiton and Rio Tinto will combine their Australian operations into a 50/50 joint venture.
The BBC refers to BHP Billiton as the possible answer to Rio’s woes. We’ll see what happens. Hopefully, Rio will err on the side of the world economy, and prevent China from taking any more than their current 9% stake in the company.
That’s all for now. Stay tuned for our regular news reports affecting the state of the mining and tire industries. Until next time, we’ll be…
Signing off…
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