Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Iron Ore War

Australia's Rio Tinto recently refused a US$19.5 billion offer from China-owned Chinalco. Rio Tinto not only rebuffed the offer, they then proceeded to form a production joint venture with BHP Billiton for all of their iron ore assets in Western Australia.

Maybe it was a godfather offer?

Four Rio Tinto Employees Accused of Espionage

The employees from Rio Tinto’s Shanghai sales office were accused of stealing government secrets. Three are part of the local sales team while one is an Australian national, Stern Hu, the general manager for the company’s China operations.

Iron ore price negotiations previously were conducted on an annual basis but rising costs and a near monopoly position (70% of global seaborne trade) by Rio Tinto Plc/BHP Billiton and Vale have seen negotiations dragging out and more buying in the spot market.