Steelmakers Friday called on relevant competition authorities to "seriously examine" BHP Billiton Ltd. (BHP) and Rio Tinto PLC's (RTP) proposed iron ore joint venture, saying it should be blocked even in its revised form.

"We are again calling on competition authorities to seriously examine the obvious implications for future pricing regimes and the competitive environment for iron ore," Ian Christmas, director general of the World Steel Association said on behalf of steel producers worldwide. The association's members represent around 85% of the world's annual steel production.

"At present we cannot see how this JV could be in the public interest and thus it should not be allowed to proceed," he said.

BHP and Rio Tinto Friday announced plans to create a 50-50 joint venture that would generate $10 billion in synergies by operating the pair's adajacent mines in the Pilbara region of Western Australia as a single operation, streamlining rail haulage, and optimizing future growth.

The joint venture is structured differently from last year's proposed merger of Rio Tinto and BHP's entire businesses. Whereas the merger would have led to the creation of a single iron ore business, under the terms of the joint venture agreement, Rio and BHP will keep their marketing divisions independent and separate from each other and the joint venture, thereby limiting the possiblity for price collusion.

Steelmakers, who rely on iron ore to make steel, are concerned that the joint venture would conentrate too much iron ore production within the hands of a single entity. Rio Tinto and BHP together accounted for 33% of the world's 2007 sea-borne iron ore trade, according to the latest figures from the association. The top three producers, including Brazil's Vale SA (VALE), account for 69.2% of the world's seaborne iron ore trade.

BHP Chief Executive Marius Kloppers said he expected the 50/50 joint venture to be notifiable to the European Union but added that the deal should present less anti-trust issues than last year's proposed merge.

"Firstly, the scope is very different. It excludes mines such as Samarco or (the Rio project) Simandou. It is also truncated in completeness of business scope," Kloppers said during an analyst call.

Under the terms of the agreement, Rio and BHP will set up a separate marketing body that will share no pricing knowledge with its owners.

Company Web site: http://www.worldsteel.org

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com (Elisabeth Behrmann in Sydney contributed to this story.)