The World Steel Association (worldsteel) has welcomed the recent announcement by Australian iron ore producers BHP Billiton and Rio Tinto of their decision to abandon their proposed iron ore joint venture in Western Australia.
Ian Christmas, worldsteel director general, commented, "We have long argued that allowing BHP Billiton and Rio Tinto to merge their Western Australia iron ore businesses was not in the public interest. However, the decision not to proceed with the JV does not address the already uncompetitive nature of the seaborne iron ore market where the top three mining companies have a combined share of about 70 percent. The largest steel company in the world today accounts for less than 10 percent of total world steel production leading to a healthy and open market for steel products worldwide. This cannot be said for iron ore, one of the key raw materials for steel production."
As SteelOrbis previously reported, on October 18, Rio Tinto and BHP Billiton announced their joint decision to end plans for an iron ore production joint venture in the Pilbara region of Western Australia since "it has become increasingly apparent that regulatory approvals of the joint venture are unlikely to be achieved."
The BHP Billiton-Rio Tinto JV, proposed in December 2009, looked 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 were among the institutions investigating the merger.