UPDATE: BlueScope Not Retreating From Rio-BHP JV Concerns

BlueScope Steel Ltd. (BSL.AU) reiterated its concerns about BHP Billiton Ltd. (BHP.AU) and Rio Tinto Plc's (RTP) planned iron ore joint venture Thursday but declined to say if it had raised its fears with regulators.

BlueScope's stance looms as a potential stumbling block to the tie-up between two of the world's biggest iron ore suppliers after Australia's competition watchdog last month cited it as a major issue in its probe of the deal.

A report in the Australian newspaper Thursday that BlueScope had not made a submission on the issue to the Australian Competition and Consumer Commission sparked speculation that it was retreating from its criticism.

But a company spokesman said Bluescope stood by reservations expressed by Chief Executive Paul O'Malley after the company's interim results earlier this year.

"Our position hasn't changed since Paul's comments at the half-yearlies, they're still valid and still represent the company's feelings and concerns about the issue," the spokesman told Dow Jones Newswires.

At the time, O'Malley questioned how the planned joint venture in Western Australia state's Pilbara region would affect the steel industry.

"I'm very concerned about anything that increases rather than decreases concentration and also increases barriers to entry from others that would give a bit more diversification of ownership," he told the Australian newspaper at the time.

"Rio and BHP have been quite open about the benefits of the joint venture. Whether that actually flows on to the steel industry or not, I'm not sure."

BHP Billiton and Rio Tinto estimate the deal will deliver US$10 billion in synergies but global regulators, concerned about possible competition issues, are subjecting it to close scrutiny.

Bluescope declined to comment on whether it had outlined its concerns in a submission to the ACCC, saying its dealings with the regulator were confidential. The ACCC also offered no comment.

The ACCC is scheduled to release its findings on the proposed joint venture by May 27.

In 2008, the regulator approved BHP's failed full takeover bid for Rio Tinto but it said in a statement of issues last month that circumstances in iron ore markets had changed since then.

It said the changes included the fact that BlueScope, the only significant buyer of iron ore in Australia, had publicly raised concerns about the deal after offering no objection to the 2008 takeover proposal.

BHP Billiton declined to comment and Rio Tinto was not immediately available.

-By Neil Sands, Dow Jones Newswires; 61-3-9292-2095; neil.sands@dowjones.com

Bluescope Steel (ASX:BSL)
Historical Stock Chart
From May 2024 to Jun 2024