Mr Alberto Calderon chief commercial officer at BHP Billiton has said that BHP Billiton Limited’s conditional offer for Rio Tinto PLC is constrained by market conditions that since May have wiped out mining company market capitalizations and metals prices.

He added that "In a down market your room to maneuver is lower. You have to be very careful."

Mr Calderon said that "We've talked about the regulatory process and we believe that we can reach a manageable outcome but I need to underline the manageability of that, because your room to maneuver is not that high. In a down market these synergies are going to be a higher proportion of the value of the companies. So they look much better in a down scenario"

The market capitalization of a combined BHPB Rio is now less than USD 200 billion, down from roughly USD 460 billion earlier this year.

BHP Billiton in February 2008 made a hostile all share offer for Rio. Rio had then rejected the deal, now valued at about USD 91 billion, as too cheap, and the bid now awaits approval from European Union competition authorities before it can go to shareholders.

Steel makers have opposed the merger, saying it would give the combined company too much control over iron ore prices. That has sparked some concern that regulators would force BHP to divest assets.