The chinese will be spewing!! with this news hitting the markets. Two of the big fellas of mining Rio Tinto and Bhp Billiton have decided to pair up and there will be less room for the chinese to make low ball offers.Australian stocks rose 1.1 percent, reaching a fresh 7-month high on Friday after Rio Tinto (RIO.AX RIO TINTO ,RIO.AX , 72.490, +5.590, +8.360%) and rival BHP Billiton (BHP.AX
BHP BILLITON – BHP.AX , 38.180, +3.070, +8.740%) rallied following an agreement to form a $116 billion iron ore joint venture.
Rio dumped plans for a tie-up with China’s Chinalco and announced a heavily discounted rights issue. Well this news is certainly not going to be taken well with the chinese, who were probably trying to get cheaper prices from iron ore by taking advantage of the competition between these 2 big iron ore miners Rio Tinto And Bhp billiton
Shares in Rio jumped as much as 13 percent to a 7-month high of A$75.75, nearly triple the price of the rights issue at A$28.29 a share, while BHP Billiton’s shares rose 10 percent to A$38.60 on the Rio venture, expected to save $10 billion in costs.