The world’s largest mining company, the Melbourne-based BHP Billiton has dropped its $16 billion bid to take over Rio Tinto which is working to develop mines in Michigan.
Rio Tinto, through its subsidiary Kennecott Eagle Minerals Co., is in the process of securing permits for a controversial nickel and copper mine in the Upper Peninsula near Marquette and has identified several other potential mine sites.
But metal prices have dropped sharply in recent months as demand has declined with consumer spending.
“Mining stocks were Europe’s worst performers after carmakers [yesterday],” Bloomberg.com reported, “as BHP’s withdrawal provided the latest example of a cooling market for mergers and acquisitions.”
Earlier this year the Chinese state-owned aluminum corporation, Chinalco, spent $14 billion for a 12 percent share of Rio Tinto. China is the largest consumer of nickel and iron and industry analysts described the Rio Tinto buy as an attempt to block a Rio Tinto-BHP merger which was seen as likely to drive up prices for China.