BHP chief offered secrets to US: WikiLeaks
By a staff reporter, with Reuters
BHP Billiton chief executive Marius Kloppers was willing to trade secrets with the United States and feared espionage from the Chinese, Rio Tinto Ltd and the Australian government, according to an American secret diplomatic cable released by WikiLeaks and reported on by Fairfax Media.
Beginning in a June 4, 2009 meeting between Mr Kloppers and US consul-general Michael Thurston and in subsequent discussions, Mr Kloppers asked US diplomats for insights on China’s intentions and said he would be willing to trade secrets in order to obtain information on China, according to Fairfax reports on the secret US cable.
In addition, Mr Kloppers reportedly took credit for derailing the controversial plan by Chinese state-owned Chinalco to invest $23.9 billion in Rio Tinto. His claim of having personally quashed the investment came a day before the deal collapsed, the report said.
Mr Kloppers, who described himself as only nominally Australian, also reportedly complained about surveillance and even espionage by the Chinese, Rio Tinto and the Australian government, describing doing business in Melbourne as being similar to playing poker when everyone can see your cards, Fairfax reported.
The cables describe Mr Kloppers as saying the Australian government was wary of too much Chinese investment and would prevent Chinese state-owned firms from owning Australia’s largest mining companies such as BHP, Rio Tinto and Woodside Petroleum Ltd, according to Fairfax.
“Clearly frustrated, Mr Kloppers noted that doing business in Melbourne (BHP’s Australian headquarters) is like ‘playing poker when everyone can see your cards’,” it quoted a US envoy to Australia, Michael Thurston, as saying in a cable.
“(Mr Kloppers) complained that Chinese and industrial surveillance is abundant and went so far as to ask consul-general (Thurston) several times about his insights into Chinese intentions, offering to trade confidences,” the cable said.
BHP Billiton declined to comment.
BHP Billiton and Rio Tinto each count China as their biggest markets but relations with China have sometimes been tense, especially in the iron ore market which Rio Tinto and BHP Billiton dominate along with Brazil’s Vale .
Tensions peaked in 2009 when Chinese steel producers failed to clinch an annual pricing deal and a Shanghai court jailed four Rio Tinto employees, including Australian citizen Stern Hu, for stealing commercial secrets and taking bribes.
Their arrest at the height of fraught 2009 iron ore price negotiations strained ties between Australia and China, and shocked the Chinese steel industry.
BHP Billiton had already riled Chinese steel mills with its 2008 bid to take over Rio Tinto, though BHP Billiton later dropped its offer in the face of stiff global opposition among competition regulators. BHP Billiton upset the mills again in 2009 with a proposed iron ore joint venture with Rio Tinto, a deal that also floundered over anti-competition concerns.
Between those two failed attempts to forge a BHP Billiton-Rio Tinto alliance, Chinese state-owned metals conglomerate Chinalco proposed a $US23.9 billion partnership with Rio Tinto, which Rio Tinto initially accepted, but later rejected.
Mr Kloppers took personal credit for quashing that deal, according to Wikileaks, Fairfax reported.
“Australia does not want to become an open pit in the southern-most province of China,” Mr Kloppers said at the time, according to the report.