European steel industry asks Commission to block JV of BHP Billiton and Rio Tinto
By Ian Armitage
Europe’s steelmakers have asked the European Commission’s anti-trust inspectors to block the proposed iron ore joint venture between Rio Tinto and BHP Billiton.
Eurofer, which represents the EU’s biggest steel companies, including ArcelorMittal, ThyssenKrupp and Corus, says that the joint venture will restrict competition because the two companies will be able to pool knowledge about volumes and demand for iron ore.
“In a global market already dominated by an oligopoly with just three suppliers - Vale, Rio Tinto and BHP Billiton - and in which the price of the iron ore has already reached a historical high in 2008, a joint venture of Australian iron ore assets is fundamentally against the interests of the steel industry, European consumers and the European economy,” Eurofer Director General Gordon Moffat said in response to the ongoing attempts of BHP Billiton to accomplish a joint venture with Rio Tinto.
“If allowed to proceed, the JV will restrict competition in relation to the fundamental competitive parameters in the seaborne iron ore markets: price, volume and quality,” Moffat adds. “Therefore, Eurofer has requested the European Commission to exercise jurisdiction over this new transaction and carefully investigate its impact on free competition.”
Rio and BHP hope to gain savings and merger benefits worth $10 billion from combining their vast iron ore mines in Australia’s Pilbara region.
SOURCE: www.eurofer.org
Edited by Ellie Duncan