Tuesday June 9, 02:29 PM
Steel makers seek probe on Rio Tinto, BHP deal
BRUSSELS (AFP) - European steel makers called Tuesday for EU competition authorities to launch a probe into a joint iron ore project between mining giants Rio Tinto (LSE: RIO.L - news) and BHP Billiton (LSE: BLT.L - news) .
The controversial joint venture agreement concerns iron ore operation in the massive Western Australia area in a deal expected to save the firms at least 10 billion US dollars.
The European steel industry federation Eurofer, whose members include the world's biggest steel makers ArcelorMittal (Amsterdam: NSCNL0001MT7.AS - news) , argued in a statement that "a merger of iron ore assets of this type in a world market already dominated by just three suppliers would not be in the interests of the steel industry, European consumers or the European economy."
"We will be calling on the European Commission to use its regulatory powers to ensure that competition concerns are addressed," Eurofer director general Gordon Moffatt said.
The European Commission had voiced serious doubts "over the original takeover scheme and opened an in-depth probe to ensure "that this takeover does not adversely affect competition in Europe" should the world's second and third largest iron ore miners merge.
On Tuesday Jonathan Todd, the EU Commission competition spokesman, would say only that it was the responsibility of the two companies "to verify whether they need to notify the plans to us under the merger regulations or not."
The new Western Australia deal means assets in the vast region will be shared equally between the two companies, and involves BHP handing over 5.8 billion US dollars for Rio equity.
The deal was announced amid media reports that Rio's planned 19.5-billion-US dollar tie-up with China's Chinalco had collapsed.
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