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December 2, 2008 11:32:54 AM CST

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Mining Mergers May Take Page From Big Oil

Posted Dec 18, 07 3:08 PM CST in Business 

(Newser) – When Anglo-Australian mining giant BHP Billiton announced its bid to merge with archrival Rio Tinto, the Wall Street Journal got déjà vu. The deal, which would combine the world’s largest and third-largest miners, looks a lot like the late-'90s megamergers that produced today’s Big Oil titans. “Really the same game is playing out,” says one emerging-market expert.

When companies like Exxon and Mobil came together, they were bidding for survival in a depressed market. Commodity prices are already through the roof, but consolidation could drive them up further, upping the cost of consumer goods worldwide. "People with monopoly power don't use it to decrease prices and develop more supply," says one industry watcher.

Source Wall Street Journal

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Alcan President and CEO Dick Evans, left, and Rio Tinto CEO Tom Albanese address a news conference in Montreal, Thursday, July 12, 2007. Mining giant Rio Tinto has offered to buy Canadian aluminum company...   (Associated Press)
An earthmover is used to shovel coal onto trucks at a mine near Changzhi, Shanxi, China, Tuesday, May 15, 2007. (AP Photo/Ng Han Guan)   (Associated Press)
Molten steel is poured at the Shougang Steel company in Beijing, in this Feb. 9, 2007 file photo. China's iron and steel industry has voiced strong objections to a proposed merger between mining groups...   (Associated Press)
In this photograph from BHP Billiton, a worker watches a conveyer belt as iron ore is taken from Mining Area C in the Pilbara in Western Australia in this undated photo. Mining giant BHP Billiton vowed...   (Associated Press)
In this photo released by BHP Billiton shows a heavy earth mover in action at the BHP Billiton Iron Ore mine at Newman in Western Australia in this undated photo. BHP Billiton PLC ended months of speculation...   (Associated Press)
Miners of the Yubileinaya mine in southern Siberia, Thursday, May 24, 2007. A series of mergers between the world's top mining companies could lead to a cartel reminiscent of Big Oil. (AP Photo/RIA-Novosti)   (Associated Press)
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