The Australian anti-trust regulator has raised concerns as to whether the proposed iron ore joint venture between BHP Billiton and Rio Tinto will affect competition and steel makers.
The Australian Competition and Consumer Commission (ACCC) said today that the country's largest steel maker BlueScope Steel, has publicly raised concerns about the proposed BHP-Rio joint venture, as well as the effect on competitors in the iron ore sector.
In a statement issued today, the regulator said, ''Issues to be further examined in the next phase of inquiries include the likelihood that the proposed joint venture would have the ability and incentive to profitably withhold supply from iron ore markets.''
It also wanted to find whether the proposed joint venture and Vale (Companhia Vale do Rio Doce) of Brazil, the world's largest producer of iron ore would have an increased ability and incentive to coordinate their supply decisions, and whether competitors are likely to be in a position to withstand these effects.
The ACCC has called for further submissions from the market by 14 April 2010 and said that the proposed date for announcement of its findings will remain as 28 April 2010.
In June 2009, BHP and Rio had formed a joint venture to develop their Western Australia's Pilbara mines, thereby creating the single biggest iron ore exporter in the world. (See: Rio-BHP team up for mining venture)