Rio Tinto and BHP Billiton have called off their multi-billion dollar
joint venture. The Australian mining giant bow to pressure from the
competition watchdog. For a month-long fight can end. Steel producers
are pleased, however.
BHP and Rio Tinto can not work as desired.
Source: dpa
HB MELBOURNE. The iron ore producers BHP Billiton and Rio Tinto have
failed in their plan for a 116 billion dollar joint venture, the
resistance of the regulator. Both companies said the first time in
mid-2009 announced plans for a joint iron ore production in Western
Australia from Monday. Competition authorities of some countries have
recently announced opposition, including the EU Commission and the
Bundeskartellamt. "I am disappointed that the regulators were not
ultimately in our opinion," said Rio Tinto chief Tom Albanese.
This would encourage competition, the alliance, he said. The major
steel companies, however, welcomed the cancellation. Most of the
companies had feared rising prices for key commodities of iron ore in
the steel industry.
The project would have displaced the market leader Vale of Brazil from
its top position as the largest supplier of iron ore. Rio Tinto and
BHP have considered the number two worldwide as number three in the
industry be saved with the project claims to more than ten billion
dollars - simply by merging the port and rail activities.
Even a "Plan B" of the company in case of failure of the billion
dollar project is now well in question. BHP and Rio Tinto would look
exactly the objections of the regulator to determine whether a
stripped down version of the alliance would be possible, said a person
familiar with the process person. Plan B provides for work only on
some selected areas of the infrastructure for iron ore.
Rio Tinto and BHP had recently been notified that their proposals by
the antitrust authorities in the European Union (EU), Australia,
Japan, South Korea and Germany were not approved, it said in the
circles. "Showed detailed talks with the EU Commission that the
company not to the joint venture had no major sales may continue,
which would not destroy the synergies and long-term growth options,"
said the person who declined to be named. "Both parties believe that
this was not acceptable were."
