Beijing group may offer US$200b to counter BHP
The country's US$200 billion sovereign wealth fund plans to step into an iron ore bidding war with Australian miner BHP Billiton for London-based Rio Tinto, according to a China Business report.
The weekly business magazine yesterday said China Investment Corp, launched on September 29 to boost investment returns on the country's massive pool of foreign reserves, could unite with domestic steelmakers to counter the US$150 billion bid by BHP for Rio Tinto.
If the latter bid were to succeed, the merger of the two companies would create a mining giant that would control more than 33 per cent of global iron ore sales - a prospect that has alarmed policymakers and steel miners in the country.
Citing unnamed sources, the China Business report said the mainland government was considering whether to bid for a stake in Rio Tinto.
'We are studying how the mainland steelmaking industry might respond to the BHP Billiton bid for Rio Tinto earlier this month,' the report said, quoting an unnamed source.