CANBERRA, June 12 (Reuters) - Australia's government gave
cautious support on Friday for a $116 billion iron ore joint
venture between BHP Billiton
The venture, announced last week, provoked an angry reaction in China where press commentaries voiced suspicions that Canberra quietly encouraged the deal as a way of sinking an alternative Chinese investment in Australia's biggest iron ore province.
Chinese firm Chinalco had planned to invest $19.5 billion in Rio Tinto, the world's second-largest iron ore miner, in a deal that would have given the state-owned company a minority stake in Rio Tinto's Hamersley iron ore operations in west Australia.
The Australian government, which had been under some political pressure to block the Rio Tinto-Chinalco deal, has denied playing any hand in Rio Tinto's decision to ditch Chinalco and turn instead to fellow Anglo-Australian miner BHP Billiton.
Ferguson said his comments about the iron ore venture's benefits were based on the assumption that it would receive all the required regulatory approvals. (Reporting by James Grubel; Editing by Mark Bendeich)