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BHP Billiton Trying To Acquire Rival Mining Company

Australian company's CEO says takeover of Rio Tinto would be good for steel industry — but steel groups criticize the move, saying it will create an iron ore monopoly.

SEOUL, South Korea (AP) — BHP Billiton Ltd. CEO Marius Kloppers intends to achieve a proposed takeover of rival mining company Rio Tinto Ltd., a South Korean media report said Wednesday.
Kloppers said in an interview with the Korean-language Maeil Business Newspaper that a takeover of Rio Tinto would achieve efficiencies by reducing overlapping investments in mines and other assets and would be good for South Korean steel makers.
BHP Billiton — the world's biggest mining company — headquartered in Melbourne, Australia, is seeking to buy London-based Rio Tinto. But its $150 billion proposal was rejected earlier this month.
Steel industry federations in Japan and China oppose the proposed buyout. The China Iron & Steel Association said this week such a deal would create a monopoly on iron ore and be unfair for steel producers.
The Japan Iron and Steel Federation criticized BHP Billiton's proposal Monday, calling it undesirable for industrial competition and pricing. The two companies together control 60 percent of Japan's raw materials imports, the federation said.
Also Monday, the International Iron and Steel Institute urged in a statement from Brussels that relevant regulatory authorities review any combination of BHP Billiton and Rio Tinto.
''This merger is not in the public interest and should not be allowed to proceed,'' said IISI Secretary General Ian Christmas in the statement.
Kloppers told the South Korean newspaper that despite opposition from global steel companies, BHP Billiton has been trying to explain to them the benefits that would come from the takeover.
He said that while the proposed deal is complicated and will take time, BHP is committed to seeing it through.