The value of the Pilbara joint venture between Rio Tinto and BHP Billiton has been seriously slashed following the announcement of the mining tax, BHP chief Marius Kloppers said.
With this cut in value, arguments have arisen as to whether BHP should still pay the extra US$5.8 billion equalisation payment to Rio.
After market comments that Rio should chase a larger equalisation payment from BHP due to the rise in iron ore prices, Kloppers said that the belief was now swinging in the opposite direction.
“Clearly the value of what we are buying is impacted by uncertainty,” Kloppers told The Australian.
However, Klopper reiterated the synergies of the deal between the two miners.
The joint venture is currently on hold as it is investigated by competition regulators in Europe, with no timetable set for the investigation’s completion.