Chinalco-Rio deal scrapped (1 Viewer)

[S.H.O.D.A.N.]

Thank fucking Christ. The last thing we need is an ever-bolder Chinese government having undue control over Australia's biggest economic assets.

The deal died before the Australian government released its decision, but considering Rudd is going to meet with Chinalco heads tomorrow, it's probable he told them to back off privately as a face-saving exercise for the Chinese. I don't think it was going to get shareholder approval, either.

Instead of the deal with Chinese government owned Chinalco, Rio Tinto has made an iron ore deal with BHP. Both Rio and BHP are Australian companies - the 3rd and 1st largest mining companies in the world, respectively. Rio and BHP combined produce about 75% of China's iron ore, which it voraciously needs to fuel internal growth.

Rio Tinto rose 13% and BHP rose 10% after the news broke. Massive gains.

Rio Scraps Chinalco Deal for $21 Billion Offering, BHP Venture - Bloomberg.com

 

[S.H.O.D.A.N.]

Why shouldn't the Chinese own it?

They will pay the existing owners a price that all parties agree on. The current Australian owners can then invest this as they see fit.

a) The Chinese wouldn't own it, China's communist government, not even representative to its people, would.

b) No, they wouldn't agree on fair prices (assuming you're speaking of ore prices). At the rate the Chinese government is acquiring minerals assets it would soon enough hold enough share in various minerals to influence pricing deals in ways that investors of old (Japan, South Korea, Germany) could not as single institutions rarely accounted for all investment.

If you're speaking purely of initial pricing of the bid - wtf? A good deal isn't the only reason to accept/reject a bid. I can't believe you said that.

c) It wasn't even a good deal for Rio or the shareholders, let alone Australians.

d) As a matter of principle, we should not be helping to fund or fuel a regime which is responsible for gross civil and human rights abuses and cares little for the prized Western ideal of liberty.

 

[aruy]

Agreed,

we have to stop honoring the red dragon for their economic and technological achievements, then turning our cheek to their abuse of human rights, and their vieled support of potential terror threats (eg North Korea)

 

[wendus]

i think china made a statement condemning the recent nuclear weapons test in north korea...
but regardless, australian companies should be kept under australian ownership.

 

[zstar]

Agreed,



we have to stop honoring the red dragon for their economic and technological achievements, then turning our cheek to their abuse of human rights, and their vieled support of potential terror threats (eg North Korea)

North Korea acts rogue by itself.

Ever heard of Juche?

In fact China has more to lose if North Korea goes crazy against South Korea and Japan.

 

[Tonthat]

i think china made a statement condemning the recent nuclear weapons test in north korea...
but regardless, australian companies should be kept under australian ownership.

Why?

 

[wendus]

why? to keep the profits in australia, where they should be? idk, why not?

 

[withoutaface]

why? to keep the profits in australia, where they should be? idk, why not?

If the shareholders are accepting a lump sum offer from the Chinese over future dividend profits then that indicates that lump sum is preferred by Australians over those dividends, so Australia is losing out by not making such a sale.

You're the one who's made the statement, you give us a strong argument for why we should engage in economic protectionism.

 

[Freedom_]

why? to keep the profits in australia, where they should be? idk, why not?

umm that's not how the market works.

 

[DavidBenGurion]

yer it is

 

[Tonthat]

If the shareholders are accepting a lump sum offer from the Chinese over future dividend profits then that indicates that lump sum is preferred by Australians over those dividends, so Australia is losing out by not making such a sale.

Exactly.
And this decision should be up to those who actually own the company. Not the general public or the government.

 

[SnowFox]

Why did the name Pig Iron Bob come to mind.

 

[S.H.O.D.A.N.]

Exactly.
And this decision should be up to those who actually own the company. Not the general public or the government.

That's false for obvious reasons (unless you're a batshit Libertarian or something). If the corporation will do something damaging to the country, it's the duty of the government to regulate it.

 

[withoutaface]

That's false for obvious reasons (unless you're a batshit Libertarian or something). If the corporation will do something damaging to the country, it's the duty of the government to regulate it.

How is this damaging to the country? They'll continue to drill holes in the ground, and they'll continue to employ people.

 

[S.H.O.D.A.N.]

How is this damaging to the country? They'll continue to drill holes in the ground, and they'll continue to employ people.

Those reasons have actually already been mentioned in my previous posts, if you'd care to read.