iron ore mining company bhp billitonSteelmaker largest company’s, Tata Steel, Posco and BaoSteel against joint venture from iron ore mining company Rio Tinto and BHP Billiton. Steel manufacturers expect the joint venture of the two iron ore mining companies (Rio and BHP) will allow both companies to control the supply of iron ore and iron ore prices.

World Steel Association, which represents nearly all major steelmaker, said this week that the European Union rejected the proposed joint venture.

iron ore mining company rio tintoSteel group says efforts “to bring great dangers to limit competition, thus reducing consumer choice because it would create an entity that controls the position of the market in the world iron ore seaborne would be more unfair than the unsatisfactory position that exist today. The JV proposed will only change the oligopoly of three players to duopoly. ”

Steel makers say that if the European Union regulatory authorities failed to stop the proposal, they would try to stop using the German and Austrian regulatory body.

This month, the European Union is expected to begin investigating the proposed business, and can decide whether to approve it at the beginning of next summer.

European regulators are highly critical of the proposed $ 142 billion hostile takeover of Rio by BHP in 2008, which will become the world’s largest merger.

Meanwhile, European regulators did not immediately cancel the deal, they described the harsh conditions required to obtain approval. The deal ultimately collapsed when the collapse of commodity prices made the purchase price can not be executed.

To obtain approval for the proposed joint venture, BHP and Rio would have to convince regulators that they would not share pricing information or strategies when negotiating with manufacturers for the purchase of steel ore. The companies have agreed to scrap a marketing plan that will allow them to market some of the iron ore together.

“This is a joint venture production,” said Robin Walker, a spokesman for Rio Tinto. “This will enable BHP Billiton and Rio Tinto to provide more ore to market faster and lower cost to the synergies between the two opened their business. There will continue to full independence in the marketing and commercial strategies, as happened today.”

BHP said the joint venture will be profitable steel makers because it would allow the two miners to operate more efficiently and produce more iron ore.

“I was not inconceivable that the two sides when they are in negotiations to sell iron ore to steel companies will not know what the production, what capacity or how many are going to market with whom they will market,” said Gordon Moffat, director general of the European Confederation of Iron and Steel Industries. “Therefore, it seems that would make sense to argue not with commercial activity.”

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