The International Iron and Steel Institute (IISI) has renewed its previous formal request made in November 2007 that all the relevant competition authorities in the EU, US, China, Australia and Japan should review the proposed merger between mining giants BHP Billiton and Rio Tinto.
Representing more than 180 steel producers worldwide, including 19 of the world's largest 20 steel companies, national and regional steel industry associations and steel research institutes, the IISI's general secretary Ian Christmas said that the IISI is again calling on competition authorities to seriously examine the obvious implications for future pricing regimes and the competitive environment for iron ore following the recent revised formal offer from BHP Billiton for Rio Tinto. He added that the proposed merger is not in the public interest, and thus should not be allowed to proceed.
Christmas said he wished to make it clear that the IISI supports free and fair trade and consolidation of steel businesses, but not to the extent of endangering competition. He went on to point out that even the largest steel company in the world today accounts for less than 15 percent of the total world steel output.
According to the IISI, allowing BHP Billiton and Rio Tinto to merge would create a virtual monopoly on Australian iron ore exports, with 80 percent of the world's seaborne iron ore exports thereby being controlled by Brazil's Companhia Vale do Rio Doce (CVRD) and the merged company.