China Says Australia Ties OK Despite Rio-BHP Deal

BEIJING (AP) — Miner Rio Tinto Group PLC's decision to opt for a tie-up with rival BHP Billiton Ltd. instead of a $19.5 billion deal with Aluminum Corp. of China will not harm wider ties with Australia, a Commerce Ministry spokesman said Monday.

But ministry spokesman Yao Jian did not rule out the possibility of anti-monopoly complaints against Rio and BHP Billiton's proposed venture.

"This single case won't affect China-Australian economic and trade cooperation," Yao said in a routine monthly news briefing. "The trading ties of the two countries are good in general," he said, noting that China is Australia's second biggest trading partner.

Yao said Rio Tinto's decision to scuttle the deal with Chinalco would not influence Beijing's treatment of foreign investments in China.

"This case won't have any negative impact on foreign companies investing in China," he said. "There will be no reason for us to take inappropriate actions."

But, given the combined large share of iron ore supplies held by Rio Tinto and BHP Billiton, and China's heavy dependence on imports, Chinese companies have good reason to pay close attention to the situation, Yao said.