BHP Billiton has ruled out a future cash bid for Rio Tinto plc on technical grounds while conceding its decision to build Ravensthorpe nickel mine was flawed from the start.
BHP’s chief executive Marius Kloppers told ABC television that a cash bid for Rio Tinto was not possible given offshore regulators’ rules after the world’s largest miner was rebuffed in its $194 billion bid for Rio Tinto.
“I think that technically that is probably not possible given the UK Takeover Panel rules and the cooling-off period that we indicated at the lapse of our bid that would apply,” Kloppers said.
The chief executive’s comments came after reports emerged Rio Tinto was in discussions with major shareholder, China’s state-backed aluminium group, Chinalco about a capital injection and asset sales in an effort to pay down some of its $57 billion of debt.
“We think that more companies are going to have to sell assets in order to meet their short-term demands,” he said, adding that the Rio Tinto assets would fit very well with BHP’s portfolio.
BHP has cut 3400 jobs in Australia in reaction to the global economic crisis including 1800 jobs at its Ravensthorpe nickel mine in Western Australia.
The project’s $6 billion cost drew criticism from analysts four years ago, and Kloppers conceded the decision to build the mine “wasn’t one of our best”.
But changes in the nickel market over the past 18 months had seen BHP trip up.
“If we were standing here when nickel was $50,000 a tonne, people would have probably said what a great investment this has been, so a lot of things have changed.”
The miner is expected to write-down $5.16 billion on Ravensthorpe.