Melbourne-Mining giant BHP Billiton said Nov.25 it has decided that a proposed acquisition of another mining giant, Rio Tinto, would not be in the shareholders’ best interest. “While we have not changed our view of the basic industrial logic of the combination, or of the longer term prospects for natural resource demand growth driven by emerging economies, we have concerns about the continued deterioration of near term global economic conditions, the lack of any certainty as to the time it will take for conditions to improve and the risks that these issues imply for shareholder value,” said Don Argus, BHP chairman. He also cited the sharp drop in commodity prices. Earlier this year, BHP spent C$284 million to gain control of a potash development venture in Canada (GM July 14, p. 12). The Rio Tinto news spurs speculation as to whether BHP will have the wherewithal to continue with this project any time soon.
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