Falling Iron Ore Prices May Influence BHP Billiton's Bid for Potash Corp

Iron ore prices are set to fall by nearly 11 % as major miners such as Rio Tinto and BHP Billiton are likely to lower prices as demand for iron ore falls in China.

Prices per metric ton may drop to $129 for iron ore. This may be a reason why BHP Billiton’s chief executive officer Marius Kloppers said that they would be very disciplined about the ongoing bid for Potash Corp.

The company had given Potash Corp. of Saskatchewan Inc. A $130 per share proposal which Potash Corp had rejected. The restraint that BHP Billiton is showing in the deal may be based on the fact that The CEO is now setting out on a two week global tour to get share holder support for the deal.

While the doubling of its full year earnings announced this Wednesday seem to be putting pressure on the company to make an increased offer, they officials would be wary of delving into its robust cash reserves with the impending decline in sales of iron ore coming up in the next quarter.

Joel Scanlon

Written by

Joel Scanlon

Joel, originally from the UK, emigrated to Australia in 1995 and spent 5 years working in the mining industry as an exploration Geo-technician where he developed skills in GIS Mapping and CAD. Joel also spent a year working underground in a gold/copper mine. Upon moving to the North Coast of NSW, Australia Joel worked as a graphic designer for a leading consultancy firm before starting a successful business providing graphic and web design services to local businesses on the eastern seaboard of Australia. Joel is skilled in project management, web programming, design, animation, database and networking, software and editing. Joel has been with AZoNetwork since its inception in 2000.

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