Friday, September 3, 2010

One Eye on China: Moving on Commodity World Stage

This piece of news comes from Reuters and the Financial Post, a Canadian online newspaper. The context is that BHP Billiton, the huge mining company based in Australia that already supplies China with iron ore, is now bidding on fertilizer giant, Potash Co. This is an interesting story to watch. It is a small window to observe how assertive China's government wants to be in world markets.

Chinese officials have ordered state-owned companies to meet with investment bankers to explore potential options to block BHP Billiton’s US$39-billion bid for Canada’s Potash Corp, according to a source with direct knowledge of the matter.
In response to the directive, Sinochem is holding meetings with multiple banks, the source said, including Citigroup, HSBC and Morgan Stanley.
The order from Beijing underscores the seriousness with which China is taking the potential BHP-Potash tie up and its implications for the pricing and supply of the important crop nutrient, despite the obstacles to launching a successful counter-bid. Read more: here at the Financial Post