Rio Tinto-BHP Billiton iron ore tie called ‘harmful’ to market
Dec 08, 2009 | 11:10 AM
| Scott Robertson
Global competition authorities are being urged to thoroughly examine the impact of a proposed joint venture between iron ore producers Rio Tinto and BHP Billiton.
The venture, announced at the weekend, has sparked warnings from the World Steel Association (WorldSteel) and the European Confederation of Iron and Steel Industries (Eurofer), both based in Brussels, which believe the combination would put steelmakers at a competitive disadvantage due to the new venture's pricing power.
"The recently signed agreement between Rio Tinto and BHP Billiton is not materially different from the proposal issued earlier this year," Ian Christmas, WorldSteel's director-general, said in a statement. "It still 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 joint venture would simply turn an oligopoly of three players into a duopoly."....
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