Tuesday, April 8, 2008

China chasing BHP stake (BHP; RTP)

Tomorrow's news today (discounted).
From the Australian:

TENSIONS between Australia and China are set to rise as Kevin Rudd arrives in Beijing today amid revelations that China is preparing to buy a multi-billion-dollar stake in BHP Billiton.
Sources in Beijing said China was in the early stages of planning to snare a bigger chunk of BHP than the 9 per cent stake in rival Rio Tinto it bought with US-based Alcoa for $15 billion in a stock market raid in February.

News of the plan - part of an attempt by China to intervene in BHP's takeover of Rio to create one of the world's biggest companies - follows a warning from the Prime Minister to the Chinese Government and industry that they will have to accept higher coal, iron ore and natural gas prices and cannot expect intervention from Canberra in the raw materials market.
On Monday, giant South Korean steelmaker Posco said it had agreed to triple the price it paid for Australian coal this year, raising expectations that Chinese steel mills would have to follow suit. The Posco deal also increased the likelihood that China would have to pay BHP and Rio 70-85per cent more for Australian iron ore - the other keyingredient in steelmaking - this year

HT: FT Alphaville