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Xu Lejiang: Baosteel not powerful enough to bid for Rio Tinto
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Responding to the news about the Baosteel Group proposing to bid for the Rio Tinto which has caused a stir in the domestic and foreign mining industry, Xu Lejiang, chairman of the Baosteel Group, said in all seriousness to Shanghai Securities News on Wednesday, "I declare the news (Baosteel's bid for Rio Tinto) was not made by me, but was hyped up by the media." He noted that the current strength of Baosteel is not powerful enough to prevent BHP Billiton, another mining giant, to acquire Rio Tinto, or to bid for Rio Tinto.

According to Xu Lejiang, the combination of Rio Tinto and BHP Billiton is not aimed at mining investments but rather restricting output and controlling price. The combination, in consequence, would strongly affect the supply-demand relationship of iron ore.

The market of iron ore produced by Australian enterprises is located mainly in Northeast Asia; China, Japan and Korea, and less in Europe.

Xu Lejiang said that European steel enterprises have already resorted to the EU's anti-monopoly law and Japanese enterprises have been doing research into the combination, while the Chinese anti-monopoly law is going to be implemented next year. The world's top three mining giants, namely Rio Tinto, BHP Billiton and CVRD, have occupied 75 percent of global iron ore trade via ocean shipping, and the combination, once becoming true in the near future, would control more metal resources. Now the global steel and mining industries, especially the steel enterprises in the Northeast Asia, are doing research on the combination.

For more details, please read the full story in Chinese. (

( December 6, 2007)

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