EC investigates iron ore deal
The European Commission (EC) has opened a formal antitrust investigation into Anglo-Australian mining companies Rio Tinto and BHP Billiton under the EU rules on restrictive business practices.
The investigation comes as a result of an agreement signed in December 2009 between the two companies to establish a production joint venture covering both companies’ entire Western Australian iron ore assets.
The Commission will examine whether the joint venture would have a negative effect on competition on the worldwide market for iron ore transported by sea.
Iron ore is the main component of steel. Virtually all iron ore mined worldwide is used in steel production. Worldwide iron ore consumption is now picking up again following a slowdown as a result of the economic and financial crisis, and is forecast to grow steadily in the coming years.
Three companies, Vale of Brazil, Rio Tinto and BHP Billiton account for most of the iron ore sold worldwide on a seaborne basis.
In 2008, the Commission examined the acquisition of Rio Tinto by BHP Billiton under the EU Merger Regulation; that transaction was abandoned by BHP Billiton in November 2008.
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