November 20, 2008

BHPB bid for Rio - BHP tells staff that costs to decide outcome

The Sydney Morning Herald reported that Mr Marius Kloppers CEO of BHP Billiton has recently told employees their operational results over the key performance period of the next six months will be an important factor in the success of the USD 160 billion hostile bid for its rival.

The paper said that Mr Klopper's memo to all staff emphasizes the need to make every effort to control production costs, given such costs have risen significantly in recent times and inflation is a real issue.

But he made it clear safety ranked as a higher priority than production and financial results, following the deaths of 11 BHP workers in the year to June 30.

The rival mining giants' last set of quarterly results were released in April, sparking a dispute between Mr Kloppers and Mr Tom Albanese CEO of Rio over which had produced the better production figures. Both results were widely viewed as weak by the market, but BHP benefited from relatively better iron ore production and lower expectations for its figures before their release.