Wednesday June 10, 12:09 PM
Japan steelmakers seek probe into Rio, BHP deal
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TOKYO (AFP) - Japanese steelmakers plan to ask regulators to probe a joint iron ore project between mining giants Rio Tinto (LSE: RIO.L - news) and BHP Billiton (LSE: BLT.L - news) , an industry official said Wednesday.
The controversial joint venture agreement concerns iron ore operations in the Pilbara region of Western Australia, a deal expected to save the firms at least 10 billion US dollars.
The Japan Iron and Steel Federation (JISF), led by the world's number two steelmaker Nippon Steel (Berlin: NPS.BE - news) , is considering a request to competition authorities to investigate and rule against the joint venture.
The deal "invites an oligopoly, which would infringe anti-trust laws, so we are considering asking the (Japan) Fair Trade Commission (FTC) for an investigation," said JISF official Yukihiro Murakami.
Europe's steel industry has already launched a request with its competition authorities, arguing that the merger in a world already dominated by just three suppliers of iron ore is against the interests of the market and the industry.
JISF chairman and Nippon Steel president Shoji Muneoka said in a statement: "According to Rio Tinto and BHP Billiton, the establishment of the joint venture will require approval of relevant anti-trust regulators.
"We therefore believe that any decision by the Japan FTC will be a very important factor."
The 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 in return for Rio equity.
The deal was announced as Rio pulled out of a proposed 19.5-billion-dollar tie-up with China's Chinalco earlier this month.
Chinese steelmakers on Wednesday said they oppose the deal, saying it had a "strong monopolistic tint".
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