Rio refuses BHP merge

The rumour mill has been working overtime with whispers that Rio Tinto is being encouraged to merge its Pilbara operations with mining giant BHP Billiton to help reduce high debt levels.

The rumour mill has been working overtime with whispers that Rio Tinto is being encouraged to merge its Pilbara operations with mining giant BHP Billiton to help reduce high debt levels.

A spokesperson for Rio Tinto told MINING DAILY that if the story were true, the company would release a statement.

“At this time Rio Tinto refuses to make any comment on the matter except to say that it is hype that has been blown out of proportion,” the spokesperson said.

The furore started after analysts at Goldman Sachs JBWere called on the miner to form a 50-50 joint venture with BHP.

“The BHP/Rio deal highlighted the strategic benefit of combining the iron ore assets in the Pilbara,” Goldman analyst Neil Goodwill said in a report.

“We believe that Rio should look to capture these benefits and we think that a combined BHP/Rio iron ore group would add significant value to both companies.”

Before its takeover bid failed, BHP said that iron ore was the only commodity the merged entity would produce more of than what the miners would produce on their own.

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