Global steel industry jittery over BHP - Rio ore pact

Global steel industry groups have called upon competition authorities to carefully review the iron ore production joint venture announced by rival Anglo-Australian miners Rio Tinto and BHP Billiton.

Over the week end Rio, which last year succeeded in fending an unsoliciated takeover bid by the larger BHP, signed an $116-billion mining joint venture in Australia's key Pilbara region that accounts for 20 per cent of Australia's iron ore exports over the weekend.

World Steel Association director general Ian Christmas said yesterday that the Rio Tinto and BHP Billiton JV, ''Carries a great danger of restricting competition thus reducing consumers' choice as it would create an entity whose controlling position in the world's seaborne iron ore market would become even less fair than the unsatisfactory position that exists today. The proposed JV would simply turn an oligopoly of three players into a duopoly.''

European steel lobby Eurofer's director general Gordon Moffat said, ''The joint venture, which has been agreed by BHP Billiton and Rio Tinto, will combine their production and infrastructure facilities and will unavoidably lead to market concentration and an increase in pricing power of the combined company which is unacceptable in competition terms.''

Both bodies called upon all relevant competition authorities to carefully review the proposed JV, which has already asked the European competition authorities to reject the joint venture.

Australian regulator, the Foreign Investment Review Board, said yesterday on its web site that it was seeking comment from customers and rivals of the miners on the Rio Tinto and BHP Billiton iron ore JV.