China line up against Rio, BHP via FMG

Sam Walsh is a hare-brained old  #@$&er outplayed by the Chinese.

http://www.*.com.au/now-it-looks-like-the-chinese-are-lining-up-against-rio-tinto-and-bhp-2015-5

news this morning in the AFR that “Chinese-linked companies have applied to the Foreign Investment Review Board seeking permission for an investment involving Fortescue Metals Group,”

Coming a week after China made a stunning intervention in the iron ore market by bank-rolling BHP and Rio Tinto’s only real global competitor, Brazil’s Vale, it seems the real targets are Australia’s two mega-miners.

Clearly the senior managers of the Chinese economy believe the end game for BHP and Rio Tinto is to dominate the iron ore landscape and thus achieve real pricing power in the decades ahead, so they are moving against them. By solidifying the balance sheet of Fortescue Metals and taking a larger, strategic, possibly blocking stake on any future moves on the Fortescue share register the Chinese ensure a major Australian competitor remains viable for the long run.

Equally, by helping Brazil’s Vale increase its productive capacity and means to get that production to market via Vale’s huge Valemax ships the Chinese are ensuring a massive global competitor as well as increased price pressure.

China is playing a long game and it seems they have BHP and Rio in their sights.