The world's second and third largest mining companies, Australia-based BHP Billiton and Rio Tinto have notified the European Commission (EC) of their intention to merge.
In the event of a successful merger, the joint company will control almost 40 percent of the seaborne iron ore market. In comparison, Brazilian miner Vale, the world's largest iron ore supplier, controls more than 33 percent of the seaborne iron ore market.
Following the notification of the proposed merger, the European steel industry asked the EC to stop the merger. EUROFER Director General Gordon Moffat warned the EC that the market dominance, to be established as a result of the Rio Tinto and BHP Billiton merger, will increase the pricing power of the companies dominating in the iron ore and coking coal markets, on top of the huge price increases seen over recent years.
"Raw material supply is a key factor in the competitiveness of the European industry and has an enormous impact on the European economy as a whole in times where industry faces additional challenges in terms of credit availability and the rising euro, in the context of the global credit crunch and the slowing economy," Mr. Moffat said.