BHP’s ambitions for Rio unshaken by financial turmoil

The recent global financial turmoil and the possibility of a slowdown in growth in the Chinese economy have shed doubts on the likelihood of BHP pursuing its hostile takeover of Rio Tinto.

However, BHP Billiton chairman, Don Argus, has told shareholders attending the group’s London annual general meeting that preparations are continuing.

Mr Argus’ ambitions towards Rio are currently bogged down in regulatory issues in Europe.

The European Commission has expressed concerns over the effect of a merger on the iron ore market and is understood to be preparing a statement setting out its specific concerns.

Once these are established BHP can propose its remedies and the Commission should be in a position to hand down its final decision in mid-January.

Meanwhile, South African competition authorities have approved the takeover, whilst acknowledging that the merger could weaken competition in the aluminium mining and processing markets.

The annual cost savings that could be achieved by a combined BHP Rio group are estimated at $3.7 billion.