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World Business

BHP, Rio iron venture plan might be reconsidered

(Agencies)
Updated: 2010-05-15 16:35

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SINGAPORE - BHP Billiton and Rio Tinto might re-evaluate plans to merge their Western Australian iron ore operations if an agreement is not reached by year end, the Wall Street Journal said on Saturday.

It reported BHP chief executive Marius Kloppers said the deal's completion was hampered by a proposed new Australian tax on mining profits.

"I still want to do it," the Journal quoted Kloppers as saying on Friday. "We have many hurdles to jump through, and the tax brings in uncertainty."

The new 40 percent resource rent tax has angered the mining industry generally and sparked talk among some of reconsidering Australian projects.

But earlier this week Kloppers had told the Australian Broadcasting Corporation both parties were keen to pursue the planned joint venture despite the tax.

The plans by the two miners to merge the iron ore operations have upset major customers, particularly in China, and are the subject of reviews by regulators in Australia and the European Union.

Kloppers and Rio Tinto chief executive officer Tom Albanese, met recently on the subject, the Journal quoted Kloppers as saying, and the two companies agreed to make Dec 31 the proposed deal's end date.

Kloppers said BHP would be working to defeat the government's tax plan, the Journal reported, and would invest elsewhere if it were approved, for example in Brazil and Peru.

"There is no geological scarcity of copper, iron ore, nickel or other minerals," he said.