Following the decision of Australian iron ore giants BHP Billiton and Rio Tinto to establish a joint venture covering the entirety of both companies' Western Australian iron ore assets, in a press release issued on June 9 the European Confederation of Iron and Steel Industries (EUROFER) has called on the European Commission (EC) to investigate the joint venture in question.
According to the EUROFER statement, the proposed merger of Australian iron ore assets by BHP Billiton and Rio Tinto is, in its effect on the world iron ore market, not materially much different from the effects which would have resulted from the hostile takeover attempt by BHP on Rio Tinto in 2008. This takeover attempt was referred to the Commission competition authorities at EUROFER's insistence and BHP withdrew its request for regulatory approval shortly after the Commission made a statement of objections.
In its release, EUROFER says that the European steel industry continues to believe that a merger of iron ore assets of this type in a world market already dominated by just three suppliers would not be in the interests of the steel industry, European consumers or the European economy.
Commenting on the issue, EUROFER director general Gordon Moffat stated, "We will be calling on the European Commission to use its regulatory powers to ensure that competition concerns are addressed."