BHP refuses to hand over "politically sensitive" information to SA Competition Commission on Rio bid

JOHANNESBURG -Mining giant BHP Billiton is refusing to hand over "politically sensitive" information to the Competition Commission investigating its proposed takeover of Rio Tinto as it fears it could fall into the hand of the minister of trade and industry and hurt the company in future. The Competition Commission said late on Monday it subpoenaed BHP to hand over strategy documents in order to make a market assessment for its investigation into a takeover, but BHP insisted they wanted to censor certain information before handing it over, said a spokesperson. "BHP Billiton says the required information is politically sensitive and could be to the company's detriment if it fell into the hands of the minister of trade and industry. Their objection comes as ministerial approval is also required for large takeovers," she said. The spokesperson said the Commission dealt with sensitive information every day and typically released a separate document without sensitive or confidential information to the public, but this process was not good enough for BHP. "They want to remove the information before they hand it over to the Commission." "In addition, it appears that the company does not have confidence in the minister." The local Competition Tribunal will on Thursday hear BHP's application to put aside the Competition Commision's summons to hand over the strategy documents. The documents apparently relate to its aluminium business. The Commission is investigating BHP's bid for Rio in order to ultimately make a recommendation to the Competition Tribunal, which will ultimately rule whether the South African operations of the two companies could merge or not. The Commission's 40 days to investigate the planned takeover expired today, but it has been granted a further 15 days by the Tribunal to conduct its investigation. BHP Billiton made a $128bn hostile bid for rival Rio Tinto last year. Meanwhile, Australia's antitrust regulator said on Friday the planned takeover might raise competition concern for the global supply of iron ore, while the European Union antitrust regulators widened a probe of the proposal last month, saying they have "serious doubts" about the combination, Bloomberg reported. Australia's competition regulator on Friday identified iron ore as a potential major concern in evaluating BHP Billiton's bid for rival Rio Tinto and said it would make a final ruling on the hostile takeover by Oct 1. It issued a statement of issues focusing on the proposed deal's likely impact on the iron ore trade and on Australian steelmakers in particular. Rio Tinto and BHP are the world's second and third largest iron ore producers, respectively, behind Brazil's Vale. If the transaction went ahead, Vale would be the only alternative supplier involved in annual benchmark price negotiations, it said. However, the Australian regulator saw no major competition issues surrounding trade in copper, gold, uranium, bauxite and alumina. "The Australian Consumer and Competition Commission (ACCC) inquiries indicated that the proposed acquisition may raise competition concerns relating to global seaborne supply of iron ore lump and iron ore fines," the Commission said in a statement. "To the extent the proposed acquisition lessens competition in the global seaborne supply of iron ore, it would be likely to have the effect of increasing global iron ore prices, which would in turn increase prices paid by steel makers in Australia." The ACC said it was also seeking comment from BHP's rivals on "certain areas of concern", including iron ore supplies. U.S. regulators have already cleared the bid, which is being vigorously defended by Rio on the grounds that it is too low. European regulators have set a Dec. 9 date for a decision. Source: Mineweb