The European Confederation of Iron and Steel Industries (EUROFER) has welcomed a German Federal Cartel Office (FCO) statement on October 15 that it intends to prohibit the proposed iron ore joint venture in Western Australia between Australian mining giants BHP Billiton and Rio Tinto.
"EUROFER has stated from the beginning that this joint venture could not be made to work in competition terms," EUROFER director general Gordon Moffat said on the same date on the announcement. "We are confident that the European Commission will follow soon with a similar decision," Moffat added.
Commenting on the proposed venture, EUROFER said: "The effect of the JV on the global iron ore market would not have been materially different from the full merger which had been proposed in 2008. A restriction in competition moving from a position of market dominance of three companies (Vale, BHP Billiton, Rio Tinto) to only two would have substantially reduced the consumer choice of supplier. It effectively would have created a duopoly with the global iron ore market in the hands of just two companies."
As SteelOrbis previously reported, the BHP Billiton-Rio Tinto JV, proposed in December 2009, looks to achieve integration of the companies' entire production activities in Western Australia, a venture worth US$116 billion.
Japan Fair Trade Commission, Korea Fair Trade Commission, the European Commission and the Australian Competition and Consumer Commission are among the other institutions investigating the merger.