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WIKILEAKS DOES IT AGAIN WITH CHINA, AMERICA & BHP BILLITON.READ ON…

Saturday, February 26th, 2011

BHP-Kloppers

‘offered secrets to the US’

Philip Dorling
February 15, 2011

BHP Billiton chief executive Marius Kloppers fears espionage from China, his business competitors and partners, and even the Australian government, but is eager to trade secrets with the United States, according to a secret cable released by WikiLeaks.

Mr Kloppers has also described doing business in Melbourne as being like ”playing poker when everyone can see your cards”, the cable says.

The comments were relayed to Washington after confidential discussions at BHP’s Melbourne headquarters between Mr Kloppers and US consul-general Michael Thurston.

Details of the meeting are among US diplomatic cables leaked to WikiLeaks and provided to The Age.

In a candid exchange with Mr Thurston, he also took personal credit for quashing what would have been the largest Chinese investment in Australia – state-owned Chinalco’s proposed $23.9 billion investment in Rio Tinto – a day before the deal collapsed.

He claimed BHP had won a strategic victory in encouraging the federal government to ”draw a line in the sand” against future large-scale Chinese investment in Australian resource companies and projects.

In his conversation with Mr Thurston on June 4, 2009 – the day before Rio walked away from a $23.9 billion deal with Chinalco – Mr Kloppers complained about covert surveillance against his company.

”Clearly frustrated, Kloppers noted that doing business in Melbourne is like ‘playing poker when everyone can see your cards’,” the consul-general reported to Washington. ”[Kloppers] complained that Chinese and industrial (Rio Tinto) surveillance is abundant and went so far as to ask consul-general several times about his insights into Chinese intentions, offering to trade confidences.”

He noted that Mr Kloppers also appeared concerned about surveillance by the Australian government. ”Kloppers even hinted about privacy concerns vis-a-vis the GOA [government of Australia],” Mr Thurston said.

After a further meeting between Mr Kloppers, Mr Thurston and then US charge d’ affairs Dan Clune in November 2009, the consul-general again reported that ”Kloppers has a keen interest in learning everything he can about the Chinese and is not shy about asking us for our impressions”.

After the June meeting, Mr Thurston reported to Washington that Mr Kloppers had confirmed that BHP ”had taken steps to derail” the proposed Chinalco investment in Rio.

”Despite Chinalco’s late May announcement that it would restructure its investment deal with Rio Tinto to allay [Australian government] concerns about the perceived Chinese influence on Rio Tinto, Kloppers confidently predicted on June 4 that the deal would fall through,” the cable reported.

Rio announced the next day, June 5, that it would not accept Chinalco’s bid to double its existing 9 per cent stake in the company by purchasing a convertible bond issue as well as purchasing minority stakes in a number of Rio assets. The proposed deal had been driven by Rio’s need to pay down massive debts resulting from its 2007 acquisition of Canadian aluminium producer ALCAN.

Describing himself as ”only nominally Australian”, the South African-born Mr Kloppers expressed the belief that Rio’s new chairman, Jan du Plessis, also a South African, would be ”more amenable” to a potential deal with BHP Billiton.

Immediately after pulling the plug on Chinalco, Rio announced a joint venture with BHP to combine their West Australian iron ore operations.

Other leaked US cables, reported by The Age in December, confirm BHP’s lobbying for Canberra to delay and if necessary block the Rio-Chinalco deal. Treasurer Wayne Swan’s chief of staff was reported as saying that ”BHP has played its cards with consummate skill”.

Speaking a day before the collapse of the Rio-Chinalco deal, Mr Kloppers said the federal government would be ”relieved if they did not have to turn down the Chinalco/Rio Tinto deal”. The US embassy in Canberra subsequently reported: ”BHP believes that it has scored a major victory by preventing a state-owned Chinese firm from influencing iron ore pricing negotiations from the producer side.

”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.”

Against the backdrop of intense lobbying of ministers and government officials over the proposed Rio-Chinalco deal, Mr Kloppers in the June meeting also expressed the view that the federal government ”would like to build up trade with China, but there is a ‘real fear’ of the Chinese government”.

”Australia does not want to become an open pit in the southernmost province of China,” he added.

Mr Thurston reported that ”Kloppers thinks the [Australian government] is drawing a line in the sand to keep Chinese state-owned firms from owning the larger mining companies such as Rio Tinto, BHP Billiton and Woodside”.

”He also believes Chinese state-owned firms would encounter heavy resistance should they make overtures at Australia’s telecommunications and banking giants.”

Last March, the Chinese government released a report on the collapse of the Chinalco-Rio deal, in which it cleared the Australian government of responsibility for killing it.

But the report singled out BHP for waging a behind-the-scenes campaign against Chinalco that helped fuel an Australian backlash and influence the federal government.

BHP Billiton  declined to comment.

Sourced & published by Henry Sapiecha

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