ANGLO American’s failure last month to outbid Rio Tinto in its hostile take-over of mining group North appeared to seal the fate of the 342 km railway planned by Robe River Iron Associates to exploit its West Angelas iron ore concession in Western Australia (RG 8.00 p457). However, this interpretation was challenged on August 8 by Japanese steel producers who had backed the Anglo American offer to North shareholders in an attempt to prevent the number of Australian iron ore suppliers being reduced from three to two. Japan is the world’s largest importer of iron ore, and they believe this would tip the balance of negotiating power from buyers to sellers.
Although North owns 53% of RRIA, Nippon Steel, Mitsui and Sumitomo Metal control the remaining 47%. Mr Tada of Mitsui assured the Financial Times that the takeover was ’not a merger of Rio’s iron ore subsidiary Hamersley with RRIA’. He went on to stress ’the fact that RRIA is an alliance that seeks its own best interests’ and said this ’will not change’.
North tried and failed to get access to Rio’s Hamersley Iron Railway for exporting West Angelas ore before signing an agreement with its partners in RRIA to build an independent parallel route. A letter issued on July 21 claimed that Rio would be ’unable to reverse the unanimous decision to develop the West Angelas Project, inclusive of the new railway construction, as per the resolution dated March 6 2000.’ Rio Tinto Chairman Sir Robert Wilson conceded on August 3 that the Japanese steelmakers might insist on a second railway, but given the waste of resources this would involve, he hoped to reach a deal ’in our mutual best interests’.
