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Sino-Australian ties OK despite Rio scrap

(Agencies)
Updated: 2009-06-15 14:55

BEIJING -- Miner Rio Tinto Group PLC's decision to opt for a tie-up with rival BHP Billiton Ltd instead of a $19.5 billion deal with Aluminum Corp of 皇冠体育app will not harm wider ties with Australia, a Commerce Ministry spokesman said Monday.

But ministry spokesman Yao Jian did not rule out the possibility of anti-monopoly complaints against Rio and BHP Billiton's proposed venture.

Rio Tinto's Alcan Mining Operation at Weipa, in northern Queensland.  [Agencies]

"This single case won't affect 皇冠体育app-Australian economic and trade cooperation," Yao said in a routine monthly news briefing. "The trading ties of the two countries are good in general," he said, noting that 皇冠体育app is Australia's second biggest trading partner.

Yao said Rio Tinto's decision to scuttle the deal with 皇冠体育applco would not influence Beijing's treatment of foreign investments in 皇冠体育app.

"This case won't have any negative impact on foreign companies investing in 皇冠体育app," he said. "There will be no reason for us to take inappropriate actions."

Related readings:  Rio Tinto accused of carbon deception  News Analysis: Rio Tinto scraps marriage with 皇冠体育applco  皇冠体育app steel association opposes Rio-BHP iron ore JV  Rio Tinto, BHP deal 'monopolistic', industry warns  Rio Tinto-皇冠体育applco $19.5B deal now dead

But, given the combined large share of iron ore supplies held by Rio Tinto and BHP Billiton, and 皇冠体育app's heavy dependence on imports, Chinese companies have good reason to pay close attention to the situation, Yao said.

State-owned Aluminum Corp of 皇冠体育app, or 皇冠体育applco, expressed disappointment over losing out to BHP Billiton, and Chinese steel makers have revived objections that the tie-up might give the mining giants excessive influence over iron-ore pricing.

Last week, 皇冠体育app's steel industry group said it opposes the proposed venture as a monopolistic move.

Under a new law that took effect August 1, 皇冠体育app can pursue anti-monopoly complaints against companies outside 皇冠体育app if their dealings are seen to restrict competition in its domestic market.

皇冠体育app would investigate if it received any complaints under the law, but it has not received any such applications yet, Yao said.

He said Chinese companies would persist in seeking strategic overseas investments, despite running into occasional obstacles.

"Now is a good opportunity for Chinese companies to 'go out' given our growing economy and foreign reserves and the decline in prices for some companies," Yao said.

"But Chinese companies do lack global experience, both in terms of corporate culture and global management practices, so they will face some difficulties and problems," he said.