BHP Billiton tries to keep minister in dark over deal

Cape Town - Mining giant BHP Billiton has launched an urgent application to prevent potentially "embarrassing" confidential commercial information from falling into government hands, as its planned takeover of Rio Tinto takes a local twist. This is according to competition commission senior legal counsel Rizia Buckas, who spoke yesterday following a statement by the Australian antitrust regulator that the world's biggest mining deal might raise competition concern about the global supply of iron ore. "They [BHP Billiton's attorneys] claimed that those specific documents contained parts, which were not only confidential, but which, if viewed by third parties, were likely to embarrass their client in its future dealings with the South African government," said Buckas. BHP Billiton said in an affidavit prepared by its attorneys that it wanted to restrict "highly sensitive and confidential" information from the minister of trade and industry, Mandisi Mpahlwa. It argued that the information was "irrelevant" to competition issues regarding the takeover. BHP Billiton is applying for local competition authority approval of its $142 billion (R1.09 trillion) hostile bid for rival Rio Tinto. The affidavit says: "BHP Billiton is wary of an unwitting release by the commission to any third party of certain sections of the irrelevant sections, which comprise confidential financial information, which may well be materially price sensitive." The commission requested the information as part of a competitiveness assessment. BHP Billiton has agreed to provide the commission with sections of the sensitive aluminium strategy document as long as the commission immediately blacks out these sections and excludes them from competition merger records. BHP Billiton's lawyer, Yonit Mendelsohn, a director at Edward Nathan Sonnenbergs, says in the affidavit that a second precondition of providing the information is that the commission "would not provide the full versions of the sensitive documents to the minister of trade and industry". But Buckas said the documents would be treated with the "utmost confidentiality", adding that blacking them out was only permitted for information classified as privileged. BHP Billiton has made an urgent application to dismiss a summons by the commission requesting the strategy information on the aluminium business. The matter will be heard by the competition tribunal on Thursday. BHP Billiton argued that the summons was an abuse of the commission's powers as granted in the Competition Act and that the company was given too little time to respond. Mendelsohn argued that the commission should first look at the documents to satisfy itself that it had no bearing on competition matters arising from the planned takeover. The affidavit says: "Having regard to the minister of trade and industry's entitlement to participate in merger proceedings before competition authorities and to be provided with a copy of all documents filed in connection with a merger, BHP Billiton's sensitivity in regard to the irrelevant sections is unsurprising and legitimate." The dispute is over paragraphs in only five documents out of a total of 78. In February BHP Billiton, which is also listed in the UK and Australia, launched a bid to acquire Rio Tinto that has so far been unsuccessful. The Australian competition and consumer commission said last week that "the merged firm may have the ability and incentive to influence global supply and prices for iron ore". The Australian regulator will give a decision by October 1. EU antitrust regulators say they have "serious doubts" about the combination that would control more than a third of global iron ore, the main ingredient in steel. Source: Business Report