German regulator set to torpedo Rio-BHP $116 bln iron ore JV
15 Oct 2010
The $116-billion Pilbara iron ore joint venture between mining giants BHP Billiton and Rio Tinto has hit the first roadblock after the German regulator yesterday signalled that it would block the deal.
The German Federal Cartel Office (FCO) said in a statement that that its current intention is to prohibit the companies' proposed iron ore production joint venture in Western Australia.
Although the German Federal Cartel Office has not given its reasons, analysts believe that the proposed JV would hurt the automobile industry in Germany.
The two Anglo Australian miners released a joint statement saying, "The parties continue to believe that the joint venture is pro-competitive and will increase the supply of iron ore.
However, both BHP Billiton and Rio Tinto acknowledge the concerns expressed by some regulators and the obstacles to achieving clearance for the joint venture."
They also added that currently they have not taken any decision about the future of the JV since regulatory discussions are continuing.
