Steel Group Eurofer Expects EU To Prohibit Rio, BHP Iron JV
15 Octubre 2010 - 5:04AM
Noticias Dow Jones
The German Federal Cartel Office's announcement that it intends
to prohibit the proposed iron ore joint venture between Rio Tinto
PLC (RIO) and BHP Billiton Ltd. (BHP) should be followed by a
similar decision at the European Commission, Eurofer, the
association that represents European steelmakers, said Friday.
"We are confident that the European Commission will follow soon
with a similar decision," said Eurofer director general Gordon
Moffat.
Iron ore is a key ingredient in steelmaking and steel producers
have blamed iron ore price volatility and rises on strained
margins.
BHP and Rio Tinto previously said the joint venture would create
savings of more than $10 billion by allowing them to streamline
their infrastructure and investments in the Pilbara region of
Western Australia in order to produce more iron ore at a faster
pace.
Under the companies' proposal, each would be entitled to half of
the joint venture's output and would market the iron ore
independently of each other.
"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," Eurofer said. "It effectively would have created
a duopoly with the global iron ore market in the hands of just two
companies."
BHP Billiton and Rio Tinto have market shares of 17% and 19%
respectively in the seaborne iron ore market, while Vale, (VALE)
the third mining giant, controls 33%, Eurofer said.
Combined they account for about two-thirds of the iron ore
traded overseas.
Eurofer represents large steelmakers in Europe such as
ArcelorMittal (MT).
-By Devon Maylie; Dow Jones Newswires; +44(20) 7842 9483;
devon.maylie@dowjones.com