BHP Billiton lobbied to torpedo Chinalco-Rio Tinto deal
16 Oct 2009
A former Australian treasury official has disclosed that mining giant BHP Billiton conducted a covert lobbying operation to torpedo China's state-owned Chinalco's $19.5-billion investment in Rio Tinto. (See: Chinalco invests $19.5 billion in Rio Tinto to raise stake to 18 per cent)
Stephen Joske, a former Treasury official until July last year, who left Canberra to join the Economist Intelligence Unit in Beijing said that BHP began a huge but discreet media and government relations campaign against Chinalco's investment in Rio Tinto.
Talking to reporters, he said that emails from BHP were circulating at the highest levels, copied to ministers' offices, "about all the 'China Inc' stuff".
BHP's operation to undermine Chinalco was in retaliation against the Chinese company teaming up with Alcoa to scupper BHP's attempt to acquire Rio Tinto in February 2008 by acquiring 12 per cent of Rio Tinto London shares for $14 billion. (See: Chinalco, Alcoa acquire 12 per cent blocking stake in Rio Tinto for $14 billion)
The $14-billion Chinese swoop came days ahead of a regulatory deadline for BHP to make a firm offer for London-listed Rio or walk away.
As soon as Chinalco announced its plans to raise its stake in Rio from 9 per cent to 18 per cent in February 2009, BHP set its public relations ball rolling in Canberra in a very discreet manner.
