BHP Billiton bullish despite crisis

BHP Billiton Ltd, the world's largest mining company, said buying Rio Tito would have amounted to taking on an unacceptable amount of debt in the present credit conditions.
 
BHP was facing its shareholders for the first time since withdrawing its $66 billion offer for Rio Tinto. At its Australian annual meeting, BHP told shareholders that uncertain conditions in the commodities markets would continue over the short term. It added that it was ready to shut down loss-making operations.

BHP and Rio Tinto are global majors in iron ore production ranking third and second largest respectively. Iron ore is a basic raw material in steel-manufacture.

The move set at rest fears among steelmakers in Asia and Europe. The proposed takeover, if it had gone through would have created a global giant with a strong clout in annual price negotiating capacity.

BHP said that despite the slump it was in a strong position financially and would continue to look for acquisitions, especially firms weakened by the current crisis.

BHP chief executive Marius Kloopers said that BHP's longstanding focus on financial stability and strong balance sheet capability has enabled the company to deliver in the current volatile environment. It would also help to capitalise on opportunities arising from the failures of other players he said.

He added that the company would consider any top-tier, long-life, low-cost assets available for sale from other miners. He said except for gold he would be open to any other metal as potential take-over target.

According to industry analysts, BHP would probably target players worth upwards of $1 billion and assets operating in the black.