DJ MARKET TALK: Few Changes From Rio/BHP Iron Ore JV - Citi
0109 GMT [Dow Jones] Citigroup says it doesn't expect any major changes to different iron ore pricing system preferences - BHP Billiton (BHP.AU) prefers spot market, Rio Tinto (RIO.AU) more contract, at least for the short-term, as a result of planned combination of miners' Pilbara operations. "Divergent production strategies (BHP maximizing output, Rio curtailing) will be more difficult to accommodate although the non-binding agreement contains clauses that are designed to accommodate," says Citi. Post 2013 benefits of lower capex costs should improve the competitive position of JV vs Vale (RIO) and new entrants. No changes to forecasts, JV main impact is through competitive landscape. China's options include overseas acquisitions, increasing domestic production. Potential targets include Sundance Resources (SDL.AU), Strike Resources (SRK.AU), Aquila Resources (AQA.AU), Atlas Iron (AGO.AU), Rio Tinto's Simandou project. (EFB)
