EU regulator investigates Rio, BHP iron ore venture
27 January 2010
The European anti-trust regulator launched an investigation on Monday into the proposed iron ore joint venture between Rio Tinto and BHP Billiton that could potentially create the single biggest iron ore exporter in the world.
The European Commission (EC)said in a statement that whether the proposed joint venture between Rio Tinto and BHP Billiton that combines their iron ore assets in Western Australia would have a negative effect on competition on the worldwide market for seaborne iron ore.
The Brussels-based EC said that the opening of proceedings does not imply that the Commission has conclusive evidence of an infringement but merely that it will investigate the case as a matter of priority.
It also gave no timeframe for completing the inquiry and said, ''There is no binding deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of the case, cooperation from the undertakings concerned and exercise of the rights of defence.''
After terminating its $19.5-billion planned deal with Chinese resources giant Chinalco, the world's second-largest iron ore miner Rio Tinto joined hands with the third-largest iron ore miner BHP Billiton for an iron ore 50:50 production joint venture encompassing all current and future Western Australian iron ore assets and liabilities from combining the companies' Western Australian Pilbara region iron ore operations. (See: Rio-BHP team up for mining venture)
The miners had also said at that time that they would market 15 per cent of the production through the joint venture and the rest would be sold separately by both companies.