EU probes iron ore mining deal
Published 26/01/2010 | 05:00
EU regulators said yesterday they will investigate a plan by the world's No 2 and No 3 iron ore miners, Rio Tinto and BHP Billiton to combine some operations because authorities suspect it could damage competition.
The European Commission said it would examine whether the companies' plan to pool iron ore mining in western Australia would affect the global prices or supply for iron ore transported by sea.
European steel makers complained last November that the mining combination could hike prices for iron ore. The EU executive set no deadline for the probe into whether the deal breaks EU antitrust rules forbidding restrictive business practices.
EU regulators helped to scupper BHP Billiton's hostile $68bn (€48bn) bid for its Anglo-Australian rival Rio Tinto in 2008. BHP Billiton abandoned the takeover attempt after the EU's executive opposed it because they said it could harm competition. Rio Tinto said the deal undervalued it.
The two miners are now planning a joint production project to pool all their iron ore assets in Western Australia state, a move that could save them billions of dollars. Australia's BHP will also pay Rio Tinto $5.8bn to equalise its contribution to the joint venture.