potential for a blocking stake by aus majors?

Good morning all,

I am surprised that we have not seen a reaction from BHP or Rio, even at this late stage, to take a blocking stake in BRM to prevent Wah Nam reaching 90% ownership, even in the event of the current directors selling their holdings.

I am not suggesting for a moment that the BRM board are about to sell their shares, but from a strategic point of view BHP and Rio would not be wanting to count on just an assurance that this is the case. Surely they would both see an advantage in denying Chinese interests 100% ownership of BRM and FRS, with the possible delisting of those companies that could follow. Such delistings would allow the Chinese to operate in future with far less public scrutiny than they would as a public companies with market reporting obligations.

It must be as obvious to them as it is to us that Chinese control of a combined BRM and FRS operation represents a relatively small but significant first step in reducing their negotiating power on future iron ore pricing.

I doubt FMG see things in the same way, as continuing Chinese assistance to FMG through ongoing purchases remains essential to achieving its overall goal of directly challenging BHP and Rio's supremacy.

I am mystified by the apparent inaction by the majors on this issue, as I am with our regulators, given that BRM was aiming to be Australia's fourth largest producer of iron ore, before adding in the current FRS resource base.

I would love to fully understand the larger picture and the strategies being adopted by the major players. That's assuming their attutide is something other than 'couldn't care less', which appears to be closer to the mark.

Regards,
Bones