Wikileaks: BHP Billiton chief Marius Kloppers harboured Chinese espionage concerns
SymbolPriceChangeBHP1.HM34.30+0.11
The head of mining giant BHP Billiton (Hamburg: BHP1.HM – news) has confirmed he harboured concerns
about Chinese and competitor espionage on his business, citing it as a
reason behind his push for market pricing of key commodities.
Marius Kloppers, BHP’s chief executive, made his comments after the Sydney
Morning Herald said it saw Wikileaks cables that suggested Mr Kloppers
had offered to share intelligence about China with US authorities.
Asked on Wednesday to confirm whether he was concerned about espionage from
China and from competitors such as rival miner Rio Tinto (Berlin: CRA1.BE – news) , Kloppers told an
earnings briefing: “I would rather like to put that in a positive.”
“One of the reasons we have pushed so hard for market-clearing prices is
so that these sorts of things are not a concern, because if you sell your
product at the market-clearing price, that everybody can read off screens,
it minimises any impact of differential information that the one party or
the other may hold,” he said.
According to the Herald , Mr Kloppers said he would exchange information
with US diplomats in 2009, as he detailed the high level of surveillance
that Chinese authorities had on his company. China is BHP’s largest
customer.
Rival mining groups were also accused of spying on BHP’s activities. “Clearly
frustrated, Kloppers noted that doing business in Melbourne is like ‘playing
poker when everyone can see your cards’,” Michael Thurston, US
consul-general to Australia, said 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 declined to comment on the report.
Price negotiations between China and mining companies were particularly
fraught in 2009 as commodity prices recovered from the credit crunch. This
led to the collapse of price discussion relating to iron ore, a vital
ingredient in steel making.
Four Rio Tinto negotiators were eventually convicted of stealing commercial
secrets given long jail sentences, including Australian national Stern Hu.
Objections from Chinese steel mills also contributed to BHP and Rio abandoning
their proposed iron-ore joint venture in the Pilbara region of Western
Australia last year.
The revelations come as BHP, the world’s largest mining company, unveiled
a 72pc surge in first-half profit .
Rising commodity prices have seen the company’s cash coffers swell and
investors are demanding the group announces plans for its cash mountain.
Some investors have complained that they want a substantial amount of cash
returned, but it is believed that Mr Kloppers is keen to make an acquisition
following the group’s failed $40bn bid for PotashCorp last year.
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