EUROPEAN Union regulators opened a competition investigation yesterday into a planned $116bn (£71.4bn) iron ore production joint venture between BHP Billiton and Rio Tinto.
The plan by Rio, the world's second largest iron ore producer, and BHP, the third largest, to combine their Western Australian iron ore operations has been criticised by industry groups which say it would restrict competition.
The European Commission, the EU executive, said it would investigate whether the planned joint venture breached EU antitrust rules which prohibit companies from fixing prices and sharing markets and that the case would be a priority.
The Commission said it would in particular examine the effect of the venture on the market for ore transported by sea. It said worldwide consumption of iron ore was picking up after a slowdown due to the economic and financial crisis, and was forecast to grow steadily in the coming years.
Eurofer, the European steelmakers’ lobbying group reiterated its opposition to the proposed deal. “We remain convinced that the joint venture would be an unacceptable concentration which will significantly restrict competition in the seaborne iron ore market,” a spokesman said.
City A.M. Reporter