BHP Pushes Ahead Rio Merger

BHP is counting on a growing Chinese market, mostly in steel consumption, and is therefore proposing to form a ‘Super Major’ mining firm.

In its presentation for Rio shareholders, BHP says a merger will “unlock value,” optimizing mineral basin positions and infrastructure – benefiting, for instance, from Diavik and Ekati’s proximity.

In terms of diamonds, while BHP mentions the two Canadian diamond mines, it will still represent a small percentage of the merged company’s activities. Currently, diamonds and specialty products represent two percent of BHP’s assets, seven percent of Rio’s, and are expected to represent four percent of the assets of the combined company.

If the merger goes through, the combined company will have a market cap of over $350 billion, while number two Shenhua will have a market cap of less then $200 billion.