EU probes Rio and BHP pooling
Source: Agencies |
January 26, 2010, Tuesday
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Print Edition
Print Edition
EUROPEAN Union regulators yesterday said they will investigate a plan by the world's No. 2 and No. 3 iron ore miners, Rio Tinto and BHP Billiton Ltd, to combine some operations because authorities suspect it could damage competition.
The European Commission said it would examine whether their plan to pool iron ore mining in Western Australia would affect the global prices or supply of iron ore transported by sea.
European steel makers complained in November that the mining combination could hike prices of iron ore, the key ingredient for the steel used to make cars, buildings and machinery.
The EU executive set no deadline for the probe into whether the deal breaks EU antitrust rules forbidding restrictive business practices.
EU regulators helped scupper BHP's hostile US$68 billion 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 US$5.8 billion to equalize its contribution to the joint venture.
Europe's steel industry group Eurofer - which represents ArcelorMittal SA, ThyssenKrupp AG and Corus Group - claimed the two companies would be able to share data on output that would affect industry negotiations to set benchmark prices and volumes.
The European Commission said it would examine whether their plan to pool iron ore mining in Western Australia would affect the global prices or supply of iron ore transported by sea.
European steel makers complained in November that the mining combination could hike prices of iron ore, the key ingredient for the steel used to make cars, buildings and machinery.
The EU executive set no deadline for the probe into whether the deal breaks EU antitrust rules forbidding restrictive business practices.
EU regulators helped scupper BHP's hostile US$68 billion 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 US$5.8 billion to equalize its contribution to the joint venture.
Europe's steel industry group Eurofer - which represents ArcelorMittal SA, ThyssenKrupp AG and Corus Group - claimed the two companies would be able to share data on output that would affect industry negotiations to set benchmark prices and volumes.
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