Miner BHP Billiton lobbied the Australian government intensively, as it tried to wreck a $19.5bn （?12.3bn） investment by Aluminium Corp of China （Chinalco） in arch rival Rio Tinto, according to a US government cable released by Wikileaks.
The leaked cables, which were published in The Sydney Morning Herald over the weekend, showed that BHP was concerned that the investment would give China insight into commercially important information. It was also claimed that BHP, the world's largest miner, had played the situation well.
"Treasurer Wayne Swan's chief of staff has told us on several occasions that BHP has played its cards with consummate skill, in part due to the increasing marginalisation of BHP CEO Marius Kloppers as BHP chairman Don Argus has taken the lead in lobbying the GOA [government of Australia] with the able assistance of BHP's well-connected VP for government relations, Bernie Delaney," a cable sent on June 7 last year said.
"BHP has been lobbying extensively to block the deal, highlighting concerns about Chinese investment and the possibility that seats on the Rio board would give the Chinese representatives important insights into the producer side of the annual iron ore price negotiations," it said.
Following the collapse of commodity markets in 2008, Rio was struggling to service $40bn of debt from the purchase of Canadian aluminium group Alcan. Rio initially proposed a "strategic investment" in Rio by Chinalco, which would have doubled the state-owned Chinese group's stake to 18pc. The proposal met opposition from Rio shareholders as it ignored pre-emption rights and was abandoned in favour of a rights issue and an iron ore joint venture with BHP in the Pilbara region of Western Australia. The proposed joint venture was abandoned in October this year as it came under increasing opposition from steel makers and regulators worldwide.
The cables also said that Rio gave Chinese security officials evidence about jailed former staff, including Stern Hu, the Australian executive who led Rio's iron ore unit in China.
However, Wayne Swan, Australia's treasurer and acting prime minister, has questioned the accuracy of the leaked cables. "Just because there is reportage of conversations and they are contained in cables, doesn't necessarily mean those cables are accurate, well grounded or in context," Mr Swan said. "Because it was a commercial matter it wasn't a matter that ultimately came to government for decision."
BHP and Rio both declined to comment.
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