Rio Tinto: Potential Iron Ore Synergies With BHP

SYDNEY -(Dow Jones)- Rio Tinto Ltd. (RTP) Iron Ore Chief Executive Sam Walsh said Monday that the miner still had potential iron ore synergies with BHP Billiton Ltd. (BHP) but said that a better option would be to expand its port at Cape Lambert in Western Australia state. "Cape Lambert is readily expandable from 80 million (tons) to 100 million tons," Walsh said at the miner's annual meeting in Sydney. "Port expansion for BHP will be more difficult." Separately, Rio Tinto Chief Executive Tom Albanese declined to directly comment on the annual iron ore talks between the dominant miners and Chinese and Japanese steel mills that are likely to conclude soon. Analysts expect benchmark contract prices to fall by about 30% on last year's record price. "It's important to recognize that the benchmark system is driven around supply and demand," Albanese told reporters, but declined to comment on how far talks have progressed. One of the key concerns for Rio Tinto's proposed US$19.5 billion tie-up with Chinalco is that it would give the Chinese aluminum producer two seats on the Rio Tinto board and potentially influence the price of iron ore, Australia's second largest export commodity. Australia's Foreign Investment Board is due to rule on the transaction by June, followed by a shareholder vote.