can anyone read chineese, page-16

Here's another piece of news ex Syd Morning Herald online today:


THE ownership structure of some of Australia's largest mining companies could be set for a major change after New York hedge fund Harbinger Capital Partners has indicated it believes commodities prices could be nearing their peak.

Harbinger, which has substantial stakes in Australian miners Fortescue Metals, Murchison Metals, Midwest and Moly Mines, has emerged as an opponent of US iron ore miner Cleveland-Cliffs' proposed $US10 billion acquisition of coalminer Alpha Natural Resources.

Cliffs - which has an 85 per cent stake in West Australian iron ore miner Portman Mining - wants to merge with Alpha to form a more diversified supplier to the steel industry. But Harbinger, which owns 18.4 per cent of Cliffs, has told the US Securities and Exchange Commission it believes the deal is "not in the best interest of shareholders".

Instead, Harbinger wants Cliffs to consider selling itself, presumably to a steelmaker or a rival iron ore company.

The Wall Street Journal, citing a source close to Harbinger, said its founder, Phil Falcone, thought commodities prices were nearing a peak and this was the best time for Cliffs to fetch a premium for itself.

The paper added Harbinger hired mergers and acquisitions boutique Moelis & Co as an adviser, noting analysts thought Russia's Severstal, global steelmaker ArcelorMittal, and US steelmakers could be potential suitors for Cliffs.

Cliffs said it believed the Alpha merger - which carries a break fee of $US350 million - would provide the greatest shareholder value over the longer term. But the deal requires approval from two-thirds of its shareholders.

Mr Falcone's views on commodities markets could have implications for the local industry. If control of Cliffs changes hands, so will control of Portman.

But more significantly, if Mr Falcone believes the iron ore market has peaked, he might be more likely to sell Harbinger's 16 per cent stake in Fortescue.

There has long been speculation that Mr Falcone is seeking a buyer for all or part of the Fortescue stake, which is worth about $3.6 billion.

Harbinger's intentions for its 19.9 per cent stake in Murchison and 16.2 per cent stake in Midwest remain unknown, but it is possible he will at some point seek to sell the holdings to Midwest's majority shareholder, Sinosteel, at a premium. Analysts have long insisted a tie-up between Murchison and Midwest is logical