Rival mining giants Rio Tinto and BHP Billiton have called off their proposed plan to jointly market up to 15 per cent of iron ore production from their mining joint venture for developing Western Australia's Pilbara mines amid fierce resistance from China and other global steelmakers, and pacify anti-trust regulators.
The joint venture was hastily cobbled up after debt-ridden Rio Tinto terminated its $19.5-billion planned deal with Chinese giant Chinalco on 5 June 2009 (See: Rio terminates Chinalco deal; to raise $15.2 billion through rights issue), under sustained opposition from shareholders, opting instead to raise $15.2 billion from existing shareholders and another $5.8 billion through a new iron ore joint venture with its arch rival BHP Billiton, whose sustained acquisition advances it had rebuffed since 2006. (See: Rio-BHP team up for mining venture)
Under the joint venture, both miners had agreed to combine their iron ore mining operations in the Western Australia Pilbara region, the world's biggest iron ore deposit concentrated in one place spread over a half-million square kilometers and had supplied more than 300 million tonnes of iron ore to steel mills around the globe this year.
The miners had said at that time that they would market 15 per cent of the production through the joint venture and the rest would be sold separately by both companies.
But yesterday, both companies said they had called off the marketing part of the JV. "The two companies believe that this change will clarify the nature of the JV for customers and emphasise its focus on realising significant production and development synergies," both miners said in a statement.
As soon as the JV was announced in June, Brussls-based steel-industry lobby group Eurofer said that it would approach the regulator in the EU to address competition concerns.