BHP Billiton Ltd is considering partnering Chinese miners to seek and
invest in mineral ore mines overseas to meet increasing demand for raw
materials.
The world’s biggest mining company can work with current “strategic
partners” such as Tongling Nonferrous Metals Group Holdings Co to look for
small and medium-sized mineral ore mines overseas, Mike Yue, manager
for concentrate sales at BHP Billiton China, has said in an interview
with Bloomberg News at Tongling city in Anhui Province.
China’s economy expanded more than 11 percent for a fourth straight
quarter in the three months ended December 31, supporting global economic
growth and demand for iron ore, copper and aluminum. BHP Billiton is
boosting production of commodities to meet rising demand from nations
such as China.
“Considering the capital funding and investment abilities of the
Chinese companies, we’re looking at the small and medium-sized mineral ore
mines,” Shanghai-based Yue said. “We’re talking to the Chinese companies
and haven’t had any targets in mind or a time frame.”
The supply of mineral ores from BHP Billiton and Chinese mining
companies are not enough to meet rising demand for raw materials in the
world’s populous nation, Yue said. Chinese miners are showing “keen interest”
to acquire assets and BHP Billiton has the expertise in exploring and
excavating mineral ore mines, he said.
“For Chinese mining companies, there is keen interest in acquiring
assets overseas and we’re also looking for such assets,” Yue said. “If we
find suitable assets, we can cooperate and develop these projects.”
Peng Changyue, an enterprise director at Tongling Nonferrous, declined
to comment on the discussions, saying he isn’t aware of the details.
Liu Shufeng, director of the commercial department at Jinlong Copper Co,
a joint venture between Tongling Nonferrous and Sumitomo Metal & Mining
Co, also declined to comment. BHP Billiton does not currently operate
any mines in China.
BHP Billiton and rival Rio Tinto Group, the world’s third-largest
mining company, are demanding an iron ore price rise for annual contracts
starting tomorrow that would exceed the 71 percent gain won by Brazil’s
Cia. Vale do Rio Doce. ”The annual price negotiations are always
difficult,” Yue said. “We have a standard global pricing level for the
minerals and the pricing varies only in transport costs.”
Rio and BHP Billiton, which account for half of iron ore sales in Asia,
are boosting cash market sales to benefit from higher prices and are
seeking to move away from the benchmark contract system.
Rio sold iron ore on the spot market for US$190 a metric ton in
December, more than twice contract prices. The firm plans to triple iron ore
sales in the cash market to 15 million tons a year, from 4.5 million
tons in 2007.
Steel mills in China, the world’s largest iron ore buyer, oppose such
moves as supplies should be sold on a long-term contract basis, they
said.