December 04, 2008

BHPB bid for Rio - Merger to affect copper prices

Mr Luo Jianchuan president of Aluminum Corp of China Ltd said that BHP Billiton plan to acquire its peer Rio Tinto Company will greatly influence cooper price.

He said "China will be affected a lot, if the two mining companies successfully complete the merger. That is because both of them possess huge resources, including iron ore and cooper."

As per a research report of Lehman Brothers Inc the merged entity will have about 37%, 15%, and 13% of the international iron ore, aluminum and cooper shipping markets.

Currently, China is the largest resources consumer around the world. Thus, it is no doubt that the further centralization of global upstream resources will result in concerns over most Chinese companies.