BHP exec: Iron ore reform could have prevented Rio case
MELBOURNE, Aug 16, 2009 (AFP) - BHP Billiton on Sunday called for more transparent iron ore pricing, saying it would help prevent situations such as the arrest of Rio Tinto executive Stern Hu in China.
BHP's chief financial officer Alex Vanselow said the world's largest miner believed iron ore should be a traded commodity, rather than having prices set annually in negotiations between suppliers and major buyers such as China.
The negotiations have been complicated this year by Australian passport holder Stern Hu's arrest in Shanghai amid a crackdown in China on alleged corruption in the iron ore market.
Hu, Rio's lead iron ore negotiator in China, was detained in Shanghai on July 5 with three Chinese colleagues and faces allegations of stealing trade secrets and bribery in relation to the iron ore talks.
Vanslow said buying and selling iron ore on the open market, in the same way as commodities such as copper are traded, meant deals would be handled in a transparent manner.
"Transparent prices... create a situation where this type of question (the Hu case) wouldn't even be possible," he told public broadcaster ABC.
Vanslow said trading iron ore on the open market would also give investors a clearer picture how prices were moving.
"People just pull out their screens, look at the curve and they have a good idea. It should be no different for iron ore," he said.
"Iron ore ... should be a traded commodity. That's better for the supplier and it's better for the buyer as well."
Vanslow also echoed BHP chief executive Marius Kloppers' statement last week that it was "business as usual" for the resources giant in China, despite the Hu case.
"Nothing has changed for us," he said.
"We continue to sell into China and we're committed to our customers there."